The Office of the Superintendent of Financial Institutions (OSFI), the regulator of federal pensions, has temporarily suspended the transfer of the commuted value for federally regulated pensions as of March 27, 2020 due to the economic crisis caused by COVID-19. These changes only impact the pension plans for members at Bruce Power and NWMO, as those are federally regulated plans.
With few exceptions, if you are planning on retiring and are employed by Bruce Power or NWMO, you will not be able to commute the value of your pension. Regular pension payments to retirees are not impacted.
In announcing this decision, OSFI explained that it was concerned that the funded status of payments had changed drastically in a short time. The changes, OFSI says, will protect all plan members’ pension benefits.
OFSI will revisit this decision “in the coming months.”
Pension plan members who elected to transfer their assets prior to March 27 but had not completed their transfer may apply to have their transfer completed. Transfers may be approved if OFSI can be assured that there will be no harm to the pension plan as a whole. For anyone who wants to transfer their pension, OFSI will accept requests and pay interest on the amounts requested until transfers are permitted once again. If members employed by Bruce Power or NWMO have questions regarding this issue they are encouraged to contact their Local Vice President.
Exemptions from the freeze may also be approved on a case-by-case basis for individuals enduring hardship, as defined in the Pension Benefits Standards Act.
In addition to ongoing regular pension payments to retirees, the following are also exempted from this freeze:
- Small benefit commutations where the plan requires that the benefit be taken in cash; and
- A death benefit paid to an estate where there is no survivor spouse or common law partner.
The federal government also announced on April 15 that it is offering a moratorium on solvency requirements for federally regulated pension plans. This measure lasts for the balance of 2020 and will help plan sponsors suffering from short-term liquidity issues that in some cases threatened the viability of a pension plan.
This measure is similar to one called for by the Canadian Labour Congress in its April 2 letter to the Ministry of Finance.
- Announcement: OFSI Actions to Address Issues Stemming from COVID-19
- COVID-19 Measures — FAQ for Federally Regulated Private Pension Plans
- Directives of the Superintendent pursuant to the Pension Benefits Standards Act, 1985
- Government announces relief for federally regulated pension plan sponsors
- Canadian Labour Congress letter to Ministry of Finance