On July 1, 2016, the 2016 Agreement Respecting Multi-jurisdictional Pension Plans (2016 Agreement) came into effect. It applies to multi-jurisdictional pension plans where:
- the pension plan’s major authority (province of registration) is Ontario, British Columbia, Nova Scotia, Quebec or Saskatchewan; and
- the plan has members or other beneficiaries (e.g. retired members, deferred vested former members, etc.) who are subject to the pension legislation of two or more of these jurisdictions.
The 2016 Agreement is a legal agreement between the governments of Ontario, British Columbia, Nova Scotia, Quebec and Saskatchewan that sets out how pension legislation in those jurisdictions will apply to a multi-jurisdictional pension plan. It was negotiated as an interim measure while the Canadian Association of Pension Supervisory Authorities (CAPSA) completes the development of amendments to deal with changing pension plan funding regimes across jurisdictions, including jurisdictions that amend their legislation to permanently eliminate requirements to fund defined benefit pension plans on a solvency basis.
Does the 2016 Agreement apply to my pension plan?
If your pension plan has members or other beneficiaries who are subject to the pension legislation of two or more of the jurisdictions that have signed on to the 2016 Agreement, the 2016 Agreement replaces both the 2011 Agreement and the 1968 Memorandum of Reciprocal Agreement
(Reciprocal Agreement), as far as those older agreements apply between the governments that have signed the 2016 Agreement.
If your pension plan does not have members or other beneficiaries who are subject to the pension legislation of two or more of the jurisdictions that have signed on to the 2016 Agreement, the existing Reciprocal Agreement and/or other applicable bilateral federal-provincial agreements continue to apply to your pension plan—not the 2016 Agreement. However, should members in British Columbia, Nova Scotia, Quebec or Saskatchewan be added to your pension plan, the 2016 Agreement would then apply to your plan.
What happens next?
After CAPSA consults with the public and finalizes proposed amendments to the 2016 Agreement, it is anticipated all Canadian jurisdictions will enter into a revised 2016 Agreement.