Alberta, British Columbia and Saskatchewan pension regulators respond to COVID-19
In light of the COVID-19 situation, pension regulators in several western provinces have made announcements relating to regulatory extensions and other matters. These announcements are summarized below.
On March 30, 2020, the British Columbia Financial Services Authority (BCFSA) released an Information Bulletin announcing certain relief measures for pension plans registered in British Columbia introduced in response to the COVID-19 pandemic and the market disruption.
The changes are summarized in the table below.
The BCFSA confirms that no further action is required by pension plan administrators to apply these relief measures. The relief measures are effective as of March 30, 2020.
Administrators may apply to the BCFSA for extensions of termination statements issued upon cessation of membership with the appropriate rationale to support the application.
The BCFSA has asked that documents normally sent by mail to the BCFSA should be sent electronically. Items that are usually provided via registered mail should be sent through secure electronic delivery, the details of which are to be arranged with the relevant BCFSA business contact. Fee payments should be sent as electronic funds or through wire transfer.
British Columbia Regulatory Filing Extensions
On April 1, 2020, the Alberta Superintendent of Pensions released EPPA Update 20-01 (the EPPA Update), which introduces certain relief measures for pension plans registered under the Alberta Employment Pension Plans Act (EPPA). The relief measures have been introduced in response to the recent market decline amid the COVID-19 outbreak.
The deadline for filing any Annual Information Returns and associated Fees, Audited Financial Statements, and/or Actuarial Valuation Reports and Cost Certificates that are due to be filed between March 31 and prior to July 1, 2020 has been extended by 180 days.
For example, pension plans with a fiscal year-end date of December 31, 2019 must file their Annual Information Return by June 28, 2020. With this extension, pension plans with a fiscal year end date of December 31, 2019 must file their annual information return by December 29, 2020. Any filing extension approved prior to the issuance of the EPPA Update is similarly extended.
The EPPA Update notes that pension plan administrators that elect to complete an actuarial valuation report as at the plan’s review date, but sooner than the usual triennial cycle, are asked to inform the Superintendent’s office of this decision as soon as possible. For off-cycle valuations, the normal 270 day filing requirement will apply.
To provide for a review date that is other than the fiscal year end of the plan, a plan text document may be amended. The review date may not be amended again within the nine-year period immediately following the effective date of the amendment.
The deadline to issue annual statements to active or retired members is extended by 180 days for statements due between March 31 and prior to July 1, 2020.
The deadline to issue a plan summary (i.e., booklet) or member-driven event disclosure statements (events such as termination, death, relationship breakdown or retirement) is extended by 90 days for statements that are due between March 31 and prior to July 1, 2020.
Similarly, the period to respond to a request for examination and provision of information is also extended by 90 days.
Pension plan administrators are encouraged to make best efforts to provide member disclosure in a timely manner despite the aforementioned member disclosure extensions.
Extension of amortization period and/or contribution remittance deadline
The EPPA Update indicates that the following extensions will be determined on a case-by-case basis, upon discussions with the Superintendent’s office:
- Extension of the amortization periods for unfunded liabilities and/or solvency deficiencies; and
- Extension of the deadline for the remittance of employer and employee contributions.
Where an extension has been granted, an amended Schedule of Expected Contributions must be filed with the plan’s fund holder.
Restrictions on transfers
The EPPA Update reminds pension plan administrators that pursuant to section 74(3) of the EPPA, a pension plan must not, without the consent of, or without being directed to do so by, the Superintendent, transfer assets out of the pension fund if the transfer would impair the solvency of the plan.
The EPPA Update recommends that plan administrators work with the Superintendent’s office for guidance in the application of section 74(3).
Extensions for AIRs and annual statements to members
On April 2, 2020, the Saskatchewan Financial and Consumer Affairs Authority (FCAA) announced extensions for certain filing and disclosure deadlines.
While Annual Information Returns (AIRs) are required to be filed within 180 days after the end of each fiscal year, the FCAA has extended the due date for all plans with an AIR due date between March 31, 2020, and July 31, 2020, by three months.
The deadline for issuing annual statements, which ordinarily must be provided to members within 180 days after the end of each fiscal year, has also been extended by three months for all pension plans with annual statement due dates between March 31, 2020 and July 31, 2020. The FCAA expects plan administrators to notify their members of the extension.
As the extensions are automatic, no action needs to be taken for them to take effect.
Temporary freeze on transfers and payments out of defined benefit plans
Effective April 16, 2020, the Saskatchewan Superintendent of Pensions issued a notice that, in the present circumstances, transfers or payments from defined benefit pension plans would impair the solvency of pension funds.
The Superintendent will review applications to transfer funds or make payments based on planspecific or special circumstances. However, it is indicated in the notice that very few exceptions to this temporary measure will be granted during this freeze period.
The measures do not affect ongoing pension payments including the commencement of new pensions, defined contribution pension plans and additional voluntary contributions.