Straight Talk  

Under-Funded Pension Plan Changes Proposed

Recently introduced amendments to the New Brunswick Pension Benefits Act (PBA) will impose new funding requirements on Defined Benefit pension plan sponsors on a full or partial wind-up, says a McInnes Cooper Pension Law Alert. Bill 66 would make New Brunswick the first Atlantic Canadian pension jurisdiction to require certain employers to make up any funding deficits that exist at the time of a full or partial pension plan wind-up. Under the current New Brunswick PBA, an employer who fully or partially winds up a pension plan is only obligated to make payments to the plan that were due as of the date of wind-up, in accordance with the PBA, the PBA regulations, and the plan’s provisions.

Under Bill 66, if a pension plan is wound-up in full or in part, and the plan assets are less than the plan’s solvency liabilities as of the wind-up date, an employer who is not insolvent will now be required to make up the full amount of the deficiency.

*  *  *

Straight Talk is provided for general information purposes only and CIBC Mellon Global Securities Services Company, CIBC Mellon Trust Company, CIBC, The Bank of New York Mellon Corporation and their affiliates make no representations or warranties as to its accuracy or completeness. Readers should be aware the content of this publication should not be regarded as legal, accounting, investment, financial or other professional advice nor is it intended for such use.