The 2020 Agreement Respecting Multi-Jurisdictional Pension Plans (2020 Agreement) between the governments indicated below came into effect on July 1, 2020. It governs the administration and regulation of multi-jurisdictional pension plans, which are plans that have members in more than one jurisdiction.
The 2020 Agreement applies to pension plans that fall under the jurisdiction of any one of the respective pension supervisory authorities of Quebec, Alberta, British Columbia, New Brunswick, Nova Scotia, Ontario, Saskatchewan and Canada, and that have members who are subject to the legislation of more than one of these jurisdictions.
The 2020 Agreement replaces (i) the 2016 Agreement Respecting Multi-Jurisdictional Pension Plans (2016 Agreement), which was signed by the governments of British Columbia, Nova Scotia, Ontario, Québec and Saskatchewan in 2016; (ii) the earlier 1968 reciprocal agreement signed between all provinces, except Prince Edward Island; and (iii) similar federal-provincial bilateral agreements, to the extent that those older agreements apply between the governments that have signed the 2020 Agreement. The 1968 reciprocal agreement and any applicable federal-provincial bilateral agreement will remain in effect for Manitoba and Newfoundland and Labrador.
The purpose of the 2020 Agreement is to streamline, to a large extent, the application to multi-jurisdictional plans of various rules set out by the pension legislation of the jurisdictions that are party to the 2020 Agreement. The 2020 Agreement establishes how to determine which pension supervisory authority in a jurisdiction is to be considered the major authority (i.e., the authority of the jurisdiction in which the plurality of active members of the pension plan is located). One of the roles of a major supervisory authority is to supervise and regulate pension plans in accordance with the 2020 Agreement and on behalf of each applicable minor authority of such plans. Under the 2020 Agreement, the pension legislation of the major authority’s jurisdiction applies to the totality of a multijurisdictional pension plan with respect to matters as described in Schedule B. Schedule B contains the following headings:
- Registration of pension plans
- Registration of pension plan amendments
- Administration of pension plans
- Pension plan administrators’ duties
- Pension plan records
- Funding of ongoing pension plans
- Pension fund investments
- Pension fund assets
- Provision of information
- Plan membership
- Appointment of a pension plan administrator
The 2020 Agreement provides that the provisions of the pension legislation of the major authority’s jurisdiction with respect to the funding of a pension plan apply to the entire pension plan, unlike the 2016 Agreement, which required certain funding rules of the minor authority’s jurisdiction to continue to apply to a pension plan in respect of members located in that jurisdiction.
The 2020 Agreement also provides that the provisions of the pension legislation of the major authority’s jurisdiction regarding annuity discharges apply to minor authorities, where the pension legislation of the major authority’s jurisdiction and the applicable minor authority’s jurisdiction contain annuity discharge requirements. Where that is the case, the major authority’s annuity discharge rules apply instead of the minor author’s rules with respect to (i) contributions made to the pension fund, including the type or form of contributions, the manner in which they must be made and deadlines for making them; (ii) minimum plan funding and solvency levels; and (iii) actuarial valuation reports to be filed with the pension supervisory authority, including the form and content of such reports, filing deadlines and actuarial standards to be applied in preparing such reports.
Finally, the 2020 Agreement includes new rules governing the allocation of a plan’s assets among the applicable jurisdictions in certain circumstances, as well as to the rules regarding the loss of major authority status and various related transitional measures.
For further information, please see our June 2020 Blakes Webinar: The 2020 Agreement Respecting Multi-Jurisdictional Pension Plans, or contact any member of our Pensions, Benefits & Executive Compensation group.
Blakes and Blakes Business Class communications are intended for informational purposes only and do not constitute legal advice or an opinion on any issue. We would be pleased to provide additional details or advice about specific situations if desired.
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