Bill C-74 receives final assent, providing enhancements to the Canada Pension Plan
An in-depth look at these and other subjects are covered in the current issue of the Morneau Shepell News & Views
TORONTO, Aug. 20, 2018 /CNW/ – Morneau Shepell released the August 2018 issue of its monthly newsletter, News & Views, in which the Company looked at a number of topics including: Bill C-74 receiving royal assent, adopting additional enhancements to the Canada Pension Plan (CPP); amendments to the OHIP+ youth pharmacare initiative; and more.
- Bill C-74 receives royal assent – Bill C-74, which allows for enhancements to the CPP, received royal assent on June 21, 2018. The additional features will provide enhanced death and disability benefits in specific cases, as well as further protection of the value of benefits for caregivers of young children. Furthermore, a supplemental actuarial report shows that the CPP contributions are sufficient to fund the improvements in the long term.
- Ontario to amend OHIP+ youth pharmacare plan – On June 30, 2018, the new Ontario government announced their intention to amend the OHIP+ youth pharmacare initiative, which the previous Liberal government introduced earlier this year. The change involves making OHIP+ the second payer for Ontario youth under the age of 25 who already have drug coverage through private drug benefit plans. Those who do not already have coverage will continue to have access to the drugs included in the Ontario Drug Benefit Formulary.
- New funding policy requirements for defined benefit (DB) pension plans registered in Quebec – DB pension plans registered in Quebec have until January 4, 2019 to adopt a funding policy following the adoption of the Regulation to amend the Regulation respecting supplemental pension plans on January 4, 2018. The regulation applies to DB plans in both the private and public sectors and must be established by the person or body who may amend the plan.
- Consultations respecting un-locatable pension plan members and unclaimed balances in pension plans – Pension plan administrators across Canada have dealt with the issue of un-locatable or missing plan members and dealing with unclaimed pension amounts. On June 21, 2018, the Canadian Association of Pension Supervisory Authorities (CAPSA) released a draft guideline for public comment, including recommended best practices and options for plan administrators searching for un-locatable pension plan members. On June 22, 2018, the federal Department of Finance launched consultation on a regime that would address unclaimed balances from federal pension plans.
- B.C. court rules multi-employer pension plan allowed to keep information confidential – A B.C. court overturned the decision of a provincial privacy commissioner that the Superintendent of Pensions is required to disclose information related to union-sponsored multi-employer pension plans to a business association. The decision stemmed from United Association of Journeymen and Apprentices of the Plumbing and Pipefitting Industry of the United States and Canada, Local 170 v. British Columbia, where the Independent Contractors and Business Association (ICBA) requested information about 16 union-sponsored pension plans. In 2017, The Office of the Information and Privacy Commissioner ordered that all the information requested by ICBA be released by the Superintendent, which has now been reversed by the Supreme Court of British Columbia.
- Findings from economic assumptions for accounting survey released – Morneau Shepell recently issued its 18th annual survey on the economic assumptions used by Canadian public companies to account for the costs of their defined benefit plans. Some highlights of the survey results include: discount rates at December 31, 2017 have decreased when compared to the previous year; more than three quarters of the companies surveyed used a compensation increase assumption between 2.5 per cent and 3.5 per cent; and those surveyed showed a 95 per cent overall ratio of pension assets to defined benefit obligation for accounting purposes.
- Tracking the funded status of pension plans as at July 31, 2018 – Morneau Shepell shared the changes in the financial position of a typical defined benefit plan with an average duration since December 31, 2017. The graph in the newsletter shows the impact of three typical portfolios on plan assets and the effect of interest rate changes on solvency liabilities of medium duration.
- Impact on pension expense under international accounting as at July 31, 2018 – Morneau Shepell showed the expense impact for a typical pension plan that starts the year at an arbitrary value of 100 (expense index). Since the beginning of the year, the pension expense has decreased by 8 per cent (for a contributory plan) due to an increase in discount rates.
About Morneau Shepell
Morneau Shepell is the only human resources consulting and technology company that takes an integrated approach to employee well-being, health, benefits and retirement needs. The Company is the largest administrator of retirement and benefits plans and the largest provider of integrated absence management solutions in Canada. LifeWorks by Morneau Shepell is a total well-being solution that combines employee assistance, wellness, recognition and incentive programs. As a leader in strategic HR consulting and innovative pension design, the Company also helps clients solve complex workforce problems and provides integrated productivity, health and retirement solutions. Established in 1966, Morneau Shepell serves approximately 24,000 clients, ranging from small businesses to some of the largest corporations and associations. With more than 4,500 employees in offices across North America, Morneau Shepell provides services to organizations around the globe. Morneau Shepell is a publicly-traded company on the Toronto Stock Exchange (TSX: MSI). For more information, visit morneaushepell.com.
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