Regulatory Initiative: Regulations Amending the Pension Benefits Standards Regulations, 1985 and the Pooled Registered Pension Plans Regulations (Variable Payment Life Annuities) – Forward Regulatory Plan 2023-2025
Title or working title of the regulatory initiative:
Regulations Amending the Pension Benefits Standards Regulations, 1985 and the Pooled Registered Pension Plans Regulations (Variable Payment Life Annuities)
Enabling acts:
Pension Benefits Standards Act, 1985, Pooled Registered Pension Plans Act
Description of the objective:
The Budget Implementation Act, 2023, No.1 amended the Pension Benefit Standards Act, 1985 (PBSA) and the Pooled Registered Pension Plans Act (PRPPA) to introduce a federal framework for variable payment life annuities (VPLAs) for federally regulated pension plans and pooled registered pension plans (PRPPs). The proposed amendments to the Pension Benefits Standards Regulations, 1985 (PBSR) and the Pooled Registered Pension Plans Regulations (PRPPR) would operationalize the framework by establishing the minimum standards requirements with respect to the election into a VPLA, payment adjustments, portability options, and reporting to plan members and the Superintendent.
Regulatory cooperation efforts (domestic and international):
The Department of Finance has engaged and will continue to engage in discussions with provinces to work towards harmonizing VPLA frameworks across jurisdictions where possible.
Potential impacts on Canadians, including businesses:
The proposed regulatory amendments would not impose any significant costs on pension plan sponsors, administrators, members, or retirees. However, there would be start up costs for a plan administrator that chooses to establish a VPLA for a pension plan. There would also be some costs associated with the ongoing operation a VPLA.
VPLAs would positively impact members of defined contribution plans and PRPPs by enabling access to a lifetime stream of retirement income. VPLAs may make PRPPs more attractive for small to medium-sized employers that do not currently offer pension plans.
Public consultation opportunities:
The Department publicly consulted on a VPLA framework in November 2020 and has engaged with key stakeholders, including plan sponsors, plan administrators, retiree groups, and actuarial professionals on the proposed elements.
When the regulatory proposal is pre-published in the Canada Gazette, Part I, interested stakeholders will have 30 days to review and comment on the proposed amendments.
Departmental contact information:
Kathleen Wrye
Director, Pensions Policy
Financial Sector Policy Branch
Department of Finance Canada
90 Elgin St.
Ottawa, Ontario K1A 0G5
Email: Kathleen.Wrye@fin.gc.ca
Date the regulatory initiative was first included in the Forward Regulatory Plan:
November 2023
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