Changes meant to 'ensure continued security for recipient's future'
Alberta has introduced updates to the rules around private sector pension plans in the province.
The changes will “ensure continued security for the recipient’s future,” according to the government.
The amendments make changes in relation to a target benefit component. Under the changes, the “provision for adverse deviation” is the sum of (a) 7.5%, and (b) a percentage equal to or greater than 0% determined by a reviewer, to the satisfaction of the Superintendent, to meet the requirements set out in subsection (2).
The percentage determined under subsection (1)(b) must be sufficient – in the opinion of the reviewer and when added to the percentage set out in subsection (1)(a) – for the plan to be able to:
- achieve the funding objectives set out in the funding policy established under section 44 of the Act in relation to the plan, and
- manage the material risks identified in the funding policy established under section 44 of the Act in relation to the plan.
“Predictable and stable funding rules are a win-win for target benefit pension plans in Alberta,” said Nate Horner, president of Treasury Board and minister of finance. “Administrators and employers now have more flexibility to consider benefit improvements, like cost-of-living increases or better retirement benefits, for plan members.”
Reducing volatility and cutting down on onerous requirements, while allowing the pension plans to provide benefit improvements such as cost-of-living requirements will improve pension funds’ ability to support their members, added the provincial government.
Currently, 57% of unretired Canadians don’t feel prepared for retirement, the Healthcare of Ontario Pension Plan (HOOPP) previously reported.
Policy change ‘will benefit thousands of pensioners’
The changes in Alberta will provide more flexibility for the almost 180,000 hard-working members across 20 target benefit pension plans, according to the government. These changes also align Alberta with other provinces and follow similar changes made by British Columbia in 2022.
The changes apply mostly to the construction trades.
Joseph Maloney, chairman of the International Brotherhood of Boilermakers National Pension Fund, welcomed the changes to the Employment Pension Plans Act.
“This policy change will benefit thousands of pensioners across Alberta, including members of the International Brotherhood of Boilermakers Pension Fund. We could not have secured this without the collective action of our members, and we commend the Government of Alberta for working with us to support workers, pensioners and seniors throughout the province.”
Recently, the government of Canada announced its intent to expand early pension eligibility for key frontline safety and security workers.
