Government announces coming into force of regulations providing relief to federally regulated pension plan sponsors

Source: 
Department of Finance Canada

May 29, 2020 - Ottawa, Ontario  Department of Finance Canada

The Government of Canada is taking strong, immediate, and effective action to protect Canadians and businesses from the impacts of the COVID-19 pandemic.

Due to the pandemic’s effects on the economy, some federally regulated pension plan sponsors are facing significant financial constraints. To provide temporary relief to sponsors of federally regulated, defined benefit pension plans, on April 15, 2020 the government announced a moratorium on solvency special payments.

Today, Finance Minister Bill Morneau announced the coming into force, on May 27, of the government’s Solvency Special Payment Relief Regulations, 2020, which establish the moratorium.

This relief will help ensure that employers have the financial resources they need to maintain their operations and their pension plans, and to protect the retirement security of their workers and retirees.

Under the regulations, from today until December 30, 2020, federally regulated defined benefit pension plan sponsors are not required to make solvency special payments. The regulations also provide accommodations for solvency special payments made since April 1, 2020.

Today’s announcement is part of the Government of Canada’s COVID-19 Economic Response Plan, which is addressing the challenges facing Canadians and their employers during this time of global uncertainty. The government continues to assess and respond to the impacts of COVID-19, and stands ready to take additional actions as needed to stabilize the economy and mitigate the impacts of the pandemic.

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