Thank you.
Division 5, part 4 also amends the Pension Benefits Standards Act, 1985, in two ways.
The first is that it clarifies that a plan member's entitlement to their pension benefits cannot be made conditional on the continued operation of the plan. In other words, it clarifies that members are entitled to the same pension benefits on plan termination as when the plan is ongoing. This clarification is in order to ensure that employers fund all benefits properly.
Second, it also amends the PBSA to permit defined benefit pension plan administrators who purchase annuities from a regulated life insurance company to transfer their obligation under the plan to provide retirees and other beneficiaries with a pension to the regulated life insurance company, subject to certain conditions. This will help increase the benefit security of retirees for whom they are purchased, as those retirees' pensions would now be provided by a life insurance company. The retirees would no longer be subject to the risk of employer insolvency, and it also helps to improve the sustainability of defined benefit plans by allowing them to de-risk.
Thank you.