Minister Morneau Reassures Canadians Their Pensions Are Safe In Wake Of The COVID-19 Pandemic
Due to the pandemic’s effects on the economy, some federally regulated pension plan sponsors are facing significant financial constraints, which are creating short-term liquidity issues and, in some cases, threatening the long-term viability of their business.
“A secure and dignified retirement for Canadians after a lifetime of hard work has always been a priority for the government, and even more so during this challenging period. By providing this temporary relief to federally regulated pension plan sponsors, we are helping to support plan sponsors so that they are able to continue to protect the retirement security of workers and retirees.’’ – Bill Morneau, Minister of Finance
To help address these issues, Finance Minister Bill Morneau today announced that the government will provide immediate, temporary relief to sponsors of federally regulated, defined benefit pension plans. This relief will be in the form of a moratorium, through the remainder of 2020, on solvency payment requirements for defined benefit plans.
The Pension Benefits Standards Regulations, 1985 require sponsors of federally regulated pension plans with funding deficiencies to make solvency special payments to eliminate these deficiencies over a period of five years.
This relief will help ensure that employers have the financial resources they need to maintain their operations and their pension plans and to protect the retirement security of their workers and retirees.
Today’s announcement is part of the Government of Canada’s COVID-19 Economic Response Plan, which is addressing the challenges facing Canadians and their employers during this time of global uncertainty.
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