On December 18, 2014, the Government of Alberta amended the new Employment Pension Plans Regulation (“EPPR”) which had come into force on September 1, 2014. Notably, the amendment extends the deadline for filing pension plan text amendments to comply with the new Employment Pension Plans Act (“EPPA”). The original deadline was December 31, 2014. The amendment eases the burden on plan administrators without requiring them to request an extension. Administrators now have until June 30, 2015, to file amendments to plan documents filed under the former Act. Any extension previously granted will automatically be extended until the new deadline.
For defined contribution pension plans where members provide directions regarding investments, the default investment option originally needed to be a balanced or target date fund by December 31, 2014. That date has been changed to June 30, 2015.
Summaries of contributions required to be made in respect of plans, other than collectively bargained multi‑employer plans (“CBMEPs”), were originally required to be provided to fundholders on the new prescribed Form 21 by October 1, 2014. The deadline to use the new form has been postponed by 120 days to January 29, 2015.
The amendment establishes a new moratorium on solvency funding for CBMEPs. The previous moratorium expires on December 31, 2014. The new moratorium has no pre-defined expiry date. CBMEPs may apply to the Superintendent for an exemption from solvency funding. After a phase-in period, exempted plans must be funded in accordance with the funding requirements applicable to target benefit provisions under the new EPPA, including the application of the Provision for
Adverse Deviation. Existing CBMEP rules, including with respect to the payment of benefits, will still apply, but the combination of no expiry date for the solvency funding moratorium and the use of the PfAD effectively allows CBMEPS to fund on a target benefit basis pending any eventual amendments to the new EPPA that would allow for the conversion of accrued defined benefits to target benefits.
The amendment also reduces the required frequency of plan administration assessments, which would otherwise have been annual. After the first assessment of the administration of the plan, which for plans with a December 31 fiscal year end must take place by December 30, 2016, assessments must be done at least every three years. This change certainly eases one aspect of the pension plan governance obligations under the new EPPA. However, it also means that plan administrators who only conduct triennial plan administration reviews will have to be diligent in ensuring that they have appropriate governance processes in place, including sufficient monitoring and reporting, to enable them to effectively conduct an administration assessment that covers a three year period.
Lastly, the amendment also makes a number of technical changes to the EPPR.
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