Pensions & Benefits Law

The Myth of the "Hands Off" Prototype Plan

Carol Buckmann — Wed, 10 Mar 2010 09:00:17 -0500

True or false? If you adopted a 401(k) plan offered by a U.S. prototype vendor, you can leave compliance entirely up to the vendor. You may be surprised to know that the answer is “false”. An easy way to quickly adopt a U.S. tax-qualified savings plan, “prototype 401(k)...

Proposed Amendments under the Income Tax Act for Employee Life and Health Trusts

Stephanie Kauffman — Tue, 09 Mar 2010 14:37:29 -0500

The Minister of Finance recently announced proposed amendments to the Income Tax Act creating a new vehicle, called an employee life and health trust (EL&H trust), through which employers can provide certain group benefits to their employees and former employees in a tax effective...

Federal Budget 2010: Changes to Taxation of Stock Options

Lesha Van Der Bij — Tue, 09 Mar 2010 08:34:04 -0500

The Canadian government recently tabled its budget for 2010, which proposes significant changes to the way in which both employees and employers are taxed in Canada on stock options, including: elimination of the deferral for public company stock options; restrictions on the deduction for...

Why Are Corporate Formalities Important?

Sandra Cohen — Fri, 05 Mar 2010 08:37:39 -0500

Many compensation and pension actions require the approval of a company’s board of directors, or a committee of the board, and for good reason. Employers should not skimp on the finalization of corporate approval via signed and dated board or committee resolutions. U.S. Case in Point: A...

Supreme Court of Canada to Consider Whether Pension Plan Benefits Based on Age are Contrary to the Charter of Rights and Freedoms

Paul Litner — Thu, 04 Mar 2010 08:39:11 -0500

Later this month, the Supreme Court of Canada will hear an appeal from the British Columbia Court of Appeal’s decision in Withler v. Canada. The issue in Withler is whether a supplementary death benefit under a pension plan that is reduced for every year the plan member’s age exceeds a...

Early Retirement Package not Discriminatory

Louise Greig — Wed, 03 Mar 2010 15:08:57 -0500

A recent decision from the Ontario Human Rights Tribunal has confirmed that an early retirement package which was offered to employees who met certain age requirements did not contravene the Ontario Human Rights Code. In Kovacs v. Arcelor Mittal Montreal, the employer decided to close a plant as a...

New Mental Health and Substance Abuse Rules Redefine Parity

Carol Buckmann — Thu, 25 Feb 2010 10:36:43 -0500

Does your U.S. group health plan have separate deductibles for medical benefits and mental health benefits? Even if they are the same dollar amount, new regulations provide that these plan provisions will violate federal benefit parity requirements. Sponsors of U.S. group health plans who have...

Even-Handedness is in the Eye of the Beholder

Ian J.F. McSweeney — Fri, 19 Feb 2010 08:43:17 -0500

Trustees and other fiduciaries are often described as having to act fairly in discharging their responsibilities to pension and health and welfare plan members. While most people have a strong sense of what is generally fair and unfair, the concept becomes more complicated when it is applied to the...

British Columbia's Initiative to Expand Pension Coverage

Stephanie Kauffman — Thu, 11 Feb 2010 12:40:18 -0500

In the last two years, four provinces (Alberta, British Columbia, Ontario and Nova Scotia) and the Federal government have embarked on extensive pension reviews. While the focus of these reviews, for the most part, was on how each jurisdiction’s pension standards legislation could be...

Pension Plan Communications: Redux

Evan Howard — Fri, 05 Feb 2010 09:57:24 -0500

Paul Litner's post Plan Communications: The New Battleground for Pension Disputes highlighted recent cases, which reinforced the need for employers to make accurate and timely pension plan member communications a top priority in plan governance and risk management. The recent Re Greyhound Canada...

FSCO Moves to Electronic Filing of AIRs

Lesha Van Der Bij — Tue, 02 Feb 2010 15:40:51 -0500

The Financial Services Commission of Ontario announced that effective March 31, 2010 pension plan administrators will be able to file Annual Information Returns (AIRs) electronically. The electronic filing method will be optional in that plan administrators will still be permitted to file AIRs in...

CAPSA Consultation Update - Prudence Standard in Pension Plan Funding and Investments

Stephanie Kauffman — Thu, 28 Jan 2010 09:55:43 -0500

As I discussed in an earlier post, the Canadian Association of Pension Supervisory Authorities recently published a consultation paper entitled “The Prudence Standard and the Roles of the Plan Sponsor and Plan Administrator in Pension Plan Funding and Investment” (PDF). The comment...

FSCO Attempts to Address Delays in Processing DB Plan Applications, but Legislative Reform Also Required

Douglas Rienzo — Tue, 26 Jan 2010 09:13:20 -0500

In January 2010, the Financial Services Commission of Ontario (FSCO) released a consultation paper outlining proposals to streamline the regulatory review process for defined benefit (DB) applications (PDF). The proposals outlined in the most recent paper – an earlier consultation...

Tribunal Looks to "Best Evidence" in Rejecting Former Employee's Claim to Pension Entitlement

Lorne Neudorf — Mon, 25 Jan 2010 09:17:29 -0500

The Financial Service Tribunal’s decision in Redmann v. Superintendent of Financial Services, (PDF) deals with the retention by pension plan administrators of accurate records relating to the termination of plan members' employment. (FSCO has also recently recommended keeping...

Check Your Loan Documents: New PBGC Reportable Event Rules May Impact Corporate Transactions

Carol Buckmann — Wed, 20 Jan 2010 09:10:51 -0500

Whenever the U.S. Pension Benefit Guaranty Corporation, the ultimate insurer of participant benefits under U.S. pension plans, re-evaluates the vast scope of its risk exposure, you can be sure that private employers will be subject to increased responsibilities and monitoring. This time, the...

Hydro One Decision: What are the Implications for Plan Wind-Ups in Light of Pending Pension Reform?

Louise Greig — Wed, 13 Jan 2010 18:22:11 -0500

The Ontario Court of Appeal’s recent decision in Hydro One confirmed that the Superintendent may use a “subset analysis” when assessing the “significance” of plan member terminations for purposes of ordering a partial plan wind-up. The impact of this decision may be...

Correcting Plan Document Mistakes under 409A: Employers Breathe a Bit Easier

Sandra Cohen — Fri, 08 Jan 2010 08:26:07 -0500

Employers trying to comply with one of the most complex U.S. tax code sections can breathe a little easier this week. The IRS has issued relief for certain inadvertent plan language failures under Section 409A of the U.S. tax code that would otherwise trap employers who improperly drafted deferred...

Ontario Bill 236 Expansion of Grow-In Rights May Prove Costly

Stephanie Kauffman — Thu, 07 Jan 2010 15:52:52 -0500

The Pension Benefits Amendment Act, 2009 (Bill 236) proposes to extend “grow-in rights” to all Ontario pension plan members whose employment is involuntarily terminated (other than for cause). While this measure was recommended in the Report of the Expert Commission on Pensions (the...

FSCO Proposed Policy on Record Retention Will Impose New Obligations on Plan Administrators

Louise Greig — Tue, 05 Jan 2010 15:20:59 -0500

If you are responsible for the day-to-day administration of a pension plan, you should take the time to review a consultation policy on record retention released by FSCO just before the holidays. Why should you be concerned? Because the consultation policy imposes new obligations on plan...

U.S. COBRA Subsidy Extended at the 11th Hour

Carol Buckmann — Thu, 24 Dec 2009 11:34:49 -0500

The Fiscal Year 2010 Defense Appropriations Act just signed by President Obama extends eligibility for the 65% COBRA premium subsidy through February 28, 2010, as well as the maximum period during which the subsidy is available from nine to fifteen months. The two month eligibility extension...