The Manitoba government is committing to introducing legislative amendments in the fall of 2019 that would strengthen the current pension benefits legislation and address the needs of pension members with their desire for more flexibility, Finance Minister Scott Fielding announced today.
“We have already taken action to establish a framework for Pooled Registered Pension Plans and provided support for improvements to the Canada Pension Plan,” said Fielding. “We know how important it is for Manitobans to have secure income and certainty in their retirement – that’s why we are making this pledge.”
The minister noted the province is committed to encouraging investments in pension funds. The proposed legislative changes to The Pension Benefits Act are based on recommendations from the Pension Commission of Manitoba, and input provided by Manitobans during public consultations in 2018, he said.
The proposed changes would modernize the rules and reduce red tape while safeguarding the security of Manitobans’ pensions including:
• providing individuals with greater flexibility in managing their retirement funds,
• preventing some individuals from facing severe financial hardship due to the inability to access their funds,
• addressing funding challenges faced by plan sponsors,
• providing solvency relief while still providing protection for member’s benefits, and
• giving parties flexibility to divide pensions based on their individual circumstances in the event of a relationship breakdown.
Additional changes would align Manitoba’s legislation with other jurisdictions including:
• amending multi-unit pension plan provisions to be consistent with provisions in multi-employer pension plans and specified multi-employer pension plans in other jurisdictions and the Income Tax Act (Canada); and
• if a plan permits, allowing a member of a defined benefit plan the choice to suspend contributions at normal retirement age (normally age 65) while remaining employed.
The minister noted the government is listening to Manitobans and has decided to not move forward with the Pension Commission’s recommendation to permit a new target benefit/shared risk plan design for single employer and multi-employer plans. The recommendation was intended to provide the private sector with more pension plan options.
By law, a review of The Pension Benefits Act is required every five years. The Pension Commission of Manitoba provided its recommendations with the goal of strengthening pension plans and the pension regulatory system.