Nova Scotia proclaims new Pension Benefits Act

The Nova Scotia government has proclaimed the new Pension Benefits Act and its accompanying Regulations to be in force effective June 1, 2015. Pension plans have until June 1, 2018 to file amendments to reflect the changes to the Act but plans must be administered in accordance with the new legislation as of June 1, 2015.

Plan administrators should familiarize themselves with the changes and the prescribed conditions required in each circumstance, including the following:

Changes affecting all plans with Nova Scotia members

  • Immediate pension benefit vesting and locking-in
  • The pre-retirement death benefit has been raised to 100% of the commuted value (CV) of a deferred pension (previously 60%)
  • DB plans may now offer phased retirement arrangements
  • “Spouses” are now defined as individuals who have cohabited for one year so long as both are not married to someone else, or three years if either of them is married to someone else
  • The small benefit unlocking threshold has been raised to a CV of 20% of the YMPE
  • New information requirements for annual and termination statements

Changes affecting Nova Scotia registered plans

  • Annual valuations are required for plans with a solvency ratio less than 0.85
  • Plans may now use a letter of credit to fund a maximum of 15% of solvency liabilities (with the exception of MEPPs)
  • Actuarial valuation reports must be filed no later than nine months after the valuation date
  • Jointly Sponsored Pension Plans are being introduced
  • Short life expectancy withdrawals revised to require less than 2 years of life expectancy
  • DC Plans may opt to offer variable benefits, which allow members to receive benefits directly from the plan instead of forcing members to transfer their entitlement out of the plan at retirement
  • Audited financial statements must be filed no later than six months after the end of the plan’s fiscal year unless prescribed conditions apply

Provisions not in effect

Some amendments to the Act and Regulations are not effective June 1, 2015, but will be adopted at a later date, including Regulations related to Target Benefits Plans, plan amendments, and asset transfers.