On Thursday, April 17, we had Paul Owens, Deputy Superintendent of Pensions and David Mulyk, Senior Manager, Risk Management, both of Alberta Treasury Board and Finance and Michael Wolpert, Partner, Lawson Lundell LLP gave us a preview of the highly anticipated new pension regulations. Here are some of the highlights:

Target Benefit Provisions

New to these regulations is the concept of Target Benefit Plans. This is a new type of "target" benefit (TB), which establishes a certain amount of monthly pension similar to a Defined Benefit (DB) pension plan. Where it differs is that the benefit may be reduced as circumstances arise, without the Superintendent's consent. Some key differences from DB plans include in some cases, smaller calculation of commuted values and the ability to temporarily improve benefits for retired members.

Solvency Reserve Account

The second major policy initiative relates to the Solvency Reserve Account (SRA). This is a separate account within the pension fund for solvency deficiency payments. Regulations will establish the rules for controlled withdrawal of actuarial excess from an SRA.

Membership Enrolment

Sponsors will have more control to determine who qualifies for enrolment in their plan.

Auto-Enrollment

The new Employment Pension Plans Act (EPPA) provides for the auto-enrollment of new members, with an opt-out provision

Member Communication

There will be more articulation of the data, which must appear on a statement; and there will be new requirements for what data is on termination statements. The number of waiver forms will be expanded to split out different functions.

Audited Financial Statements

DB and TB provisions: Increased asset thresholds before an audited financial statement is required.

Defined Contribution (DC): No audited financial statement required, but the Superintendent can request a year-end statement of accounts from the fund holder.

Funding and Governance Policy

The new regulations will provide content requirements for the new funding and governance policies for pension plans.

Vesting

Immediate vesting is being introduced (similar to Federal, Ontario, Manitoba and Quebec). This will be retroactive.

Administrative Penalties

The Superintendent will now have the ability to levy an administrative penalty for non-compliance. This is not being introduced to fund superintendent activities but to promote and encourage better regulatory compliance.

Pension Tribunal

Alberta will establish a new Employment Pension Tribunal to provide as a check and balance against expanded regulatory discretion and power.

Missing Persons

The administrative process will be simplified and there will be the creation of an "Unclaimed Property Fund."