Summary#
Bill 15, An Act Respecting Pension Benefits, would amend New Brunswick’s Pension Benefits Act, its regulation, the Pooled Registered Pension Plans Act and the Teachers’ Pension Plan Act. Its stated goal is not given in the supplied text; the bill changes pension rules and powers to make regulations. The material supplied is the first-reading version, not a consolidated version of current law, and does not establish whether later amendments were adopted.
- A pension plan may provide for a lump-sum payment of certain small pension benefits, including some benefits payable to a former member or, after the former member’s death, to someone entitled to a joint-and-survivor pension. The bill sets limits: an annual benefit of no more than 4% of the Year’s Maximum Pensionable Earnings (YMPE), or a commuted value below 20% of YMPE.
- A person entitled to one of those payments may direct the plan administrator to transfer it to a registered retirement savings plan or fund within 90 days of receiving a specified written statement. Any amount above the tax-law transfer limit must be paid to that person as a lump sum.
- Administrators must deliver certain unclaimed commuted-value payments to the Director under the Unclaimed Property Act.
- The bill exempts certain multi-employer plans, and some defined-benefit plans with fixed employer contributions set under a collective agreement, from requirements in two parts of the Pension Benefits Act. The supplied text does not include those requirements.
- The bill changes rules for non-residents, regulation-making powers and a Teachers’ Pension Plan Act provision. It also corrects a French-language term.
What it means for you#
- Former members and survivors: A plan may offer a lump-sum payment where the bill’s thresholds are met; the bill does not require every plan to offer it. If you are entitled to such a payment, you may direct a transfer to a registered retirement savings arrangement within 90 days of receiving the specified statement. Any amount above the tax-law transfer limit is paid to you as a lump sum.
- Former members living outside Canada: A member entitled to a deferred pension may withdraw its commuted value if they are not resident in Canada for income-tax purposes and give the administrator a non-residence declaration on a form provided by the Superintendent.
- Pension plan administrators: They must deliver covered unclaimed commuted-value payments to the Director under the Unclaimed Property Act. The bill does not set out the details of that Act.
- Certain pension plans: Plans in the named categories are excluded from requirements in sections 12 and 65 of the Pension Benefits Act. The supplied text does not say what those requirements are, so their practical effect cannot be verified.
- Members, employers and teachers: The bill does not directly state a change to pension amounts or contributions for them. It repeals a provision of the Teachers’ Pension Plan Act, but its effect cannot be verified from the supplied text.
Money#
No publicly available information on estimated costs or savings is included in the supplied material.
- The bill sets no amount for staffing, administration or enforcement. It does require administrators to deliver specified unclaimed payments to the Director.
- The bill allows regulations to set conditions and amounts for some withdrawals, and to give discretion to the Superintendent, an administrator or a financial institution. It does not itself set those further withdrawal rules.
- The bill does not state that it creates a new office, fund, tax, fee or benefit.
What is unclear#
- The supplied material does not include the full Acts or regulation being changed. I could not verify how the amended provisions compare with current law or what the requirements in sections 12 and 65 are.
- It does not explain how the repeal of subsection 36(8), the related regulation change, or the repeal in the Teachers’ Pension Plan Act would affect people under current rules.
- The bill does not give a calendar-year dollar value for the YMPE thresholds. It also does not set out the process for delivering unclaimed property beyond referring to the Unclaimed Property Act.
- The bill’s changes start on a day or days set by proclamation; no start date is stated. No separately labelled amended version or record of adopted amendments was supplied.
Case for#
- A possible argument for the bill is that it lets plans pay out very small benefits as a lump sum, rather than retain them as pension benefits.
- The option to direct a payment to a registered retirement savings arrangement may help eligible recipients keep the money in a tax-recognized savings arrangement, subject to tax-law limits.
- Requiring delivery of specified unclaimed payments to the Director gives administrators a route for handling those funds under the Unclaimed Property Act.
- The bill limits the small-benefit cash-out option with specific thresholds and makes it optional for pension plans.
Case against#
- A lump-sum payment replaces a pension benefit for the recipient; the bill does not require plans to offer recipients the option of keeping a small benefit in the plan.
- The bill allows regulations to set withdrawal conditions and to delegate discretion, but does not set those conditions or limits in the bill itself.
- The bill exempts named types of plans from two statutory requirements, but the supplied text does not show what those requirements are. Readers cannot assess the effect of the exemptions from this material alone.
- The bill does not state the administrative cost of the new duties or explain how the changes fit with existing pension processes.