Due to the COVID-19 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.
As a result, Finance Minister Bill Morneau said 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.
“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,” said Morneau. “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.’’
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.
The government said it will also consult with stakeholders over the coming months on options to provide relief from 2021 funding obligations, as necessary.
The measure is part of the government’s overall COVID-19 Economic Response Plan, which is addressing the challenges facing Canadians and their employers during this time of global uncertainty.