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Manitoba introduces legislation to reform pension funding and provide more unlocking options

On November 27, 2019, the Manitoba government introduced Bill 8, The Pension Benefits Amendment Act. Bill 8 will amend The Pension Benefits Act (the PBA) to permit greater flexibility for unlocking pension funds. In addition, the Manitoba government has promised to reduce solvency funding requirements to 85% of solvency liabilities, enhance going concern funding requirements, and introduce solvency reserve accounts. The measures follow the Manitoba Pension Commission’s January 2018 proposals, which were discussed in the February 2018 News & Views.

Funding reform

Bill 8 will permit pension plans to establish solvency reserve accounts for special payments in respect of solvency deficits. These accounts could be withdrawn by employers under specified circumstances, regardless of whether the plan documents permit employers to withdraw pension surplus.

The Manitoba government announcement states that the government will reduce solvency funding requirements to 85% of solvency liabilities and enhance going concern funding requirements. These proposals would be enacted through future regulations.

Unlocking provisions

Bill 8 will permit individuals with funds held in a locked-in retirement account (LIRA) or life income fund (LIF) to unlock the entire amount after reaching the age of 65. The individual may make a lump sum withdrawal of the balance or transfer the balance to a registered retirement income fund (RRIF) or to a registered retirement savings plan (RRSP). The consent of the spouse or common-law partner would be required.

Bill 8 will also permit withdrawals from LIRAs and LIFs on prescribed grounds of financial hardship, subject to spousal consent.

Flexibility in relationship breakdown division

Several measures will provide greater flexibility upon spousal or common-law relationship breakdown. Bill 8 will allow parties to split pension assets up to 50%, rather than electing from the current division options of a 50/50 split or no division at all.

Bill 8 will also clarify that the small pension commutation rule applies to locked-in amounts payable to a former spouse or common-law partner upon a division of pension on the breakdown of a relationship.

Commencing pension after the normal retirement age

Bill 8 would permit a pension plan member who continues to be employed after reaching the normal retirement age (NRA) to elect to stop contributing to the plan and accruing benefits, if permitted to do so under the terms of the plan. This would permit the member to retire and commence receipt of a pension without having to terminate employment.


The reduction of solvency funding requirements from 100% to 85% and the enhancement of going concern funding requirements is consistent with Ontario’s funding reform, as well as proposals in British Columbia and Nova Scotia. The introduction of more relaxed unlocking rules and flexibility in pension division promises to make it easier for Manitoba pension plan members and former spouses to manage and access their retirement funds during financial hardship and relationship breakdown.

News & Views - December 2019 (PDF)