Government Coming Through with a Plan to help Employers in Tough Times

December 12, 2011

CHANGES TO PENSION LAW WILL HELP EMPLOYERS IN TOUGH ECONOMIC TIMES, IMPROVE SECURITY OF PLANS: HOWARD

Changes to Manitoba’s pension plan lawwill improve security of plansby providing funding options for employers during tough economic times while strengthening the monitoring of plans, Labour and Immigration Minister Jennifer Howard announced today.
“The best pension security is a healthy pension plan sponsored by a financially responsible employer,” said Howard.  “These changes will help sponsors or employers meet pension promises during tough economic times and ensure administrators file pension plan information with the province on time.”
Two of the new regulations under the Pension Benefits Act take effect Jan. 1 and will focus on:

• New penalties for the late filing of information used by the province to monitor pension plans.  The timely filing of documentation with the province is important for monitoring pension plan complianceto ensure plans can deliver the promised benefits, the minister said. 
• Allowing the use of letters of credit to guarantee funds to cover promised benefits to employees.   During an economic downturn, the letters of credit would allow employers to meet pension plan funding requirements without using scarce operating funds, she added.

The province has also introduced a new Special Payments Relief Regulation.  The regulation, similar to one introduced in 2008, allows employers to extend the solvency amortization period to 10 years from five.  Doubling the amount of time allowed for funding solvency deficiencies will give employers greater flexibility and will help ensure plans can meet their benefit obligations in the longer term, said Howard.
More information on the changes to Manitoba’s Pension Benefits Act and Regulation is available at www.gov.mb.ca/labour/pension/.

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