In our most recent posts, we highlighted some of the regulatory relief available to administrators of Ontario registered pension plans and plans registered in jurisdictions other than Ontario as a result of COVID-19. In this post, we highlight additional relief measures that have been announced for administrators and sponsors of registered pension plans, including the announcement of significant funding relief for sponsors of federally regulated defined benefit registered pension plans.

Federal

On April 15, 2020, the federal government announced that it will be providing immediate temporary relief to sponsors of federally regulated defined benefit registered pension plans in the form of a moratorium on solvency payments under such plans through the remainder of 2020. Recognizing the potential impact that the COVID-19 crisis could have on defined benefit plan assets and liabilities and solvency funding obligations under such plans in 2021, the federal government also indicated that it will consult with stakeholders over the coming months to provide relief from 2021 funding obligations, as necessary.

The announcement follows the previous measures for federally registered pension plans announced by the federal pension regulator, the Office of the Superintendent of Financial Institutions, in response to the COVID-19 crisis. These include the announcement of a full freeze on portability transfers and annuity purchases related to defined benefit provisions of federally registered pension plans and various filing deadline extensions for administrators of all federally registered pension plans. It is the most significant relief measure announced to date for sponsors of registered pension plans in response to the COVID-19 crisis in Canada.

The announcement is a welcome measure for employers that sponsor federally registered defined benefit pension plans and is intended to help those employers maintain such plans which, in turn, it is hoped will help protect the retirement security of plan members. The funding relief is part of the broader actions that the Canadian federal government has taken in its attempt to support Canadian businesses during the COVID-19 crisis.

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