Most Significant Changes in 35 Years Would Secure Manitobans’ Pensions into the Future: Howard
Meeting the needs of today’s workforce with improved security, flexibility and greater transparency of pension plans is part of a revised Pension Benefits Act and regulations, Labour and Immigration Minister Jennifer Howard announced today.
“Manitobans will have one of the strongest pension systems in Canada, well ahead of changes being proposed in other jurisdictions,” said Howard. “We want Manitobans to know these changes are about your money, your future and your voice.”
These changes would represent the most significant overhaul of the Pension Benefits Act in 35 years, providing Manitoba workers with a strengthened, modernized act and regulations, the minister said. The new regulations under the Pension Benefits Act will focus on:
- responding to changes in today’s workforce,
- greater accountability, and
- security for pensions into the future.
The new provisions would recognize and be better suited to the realities of today’s workforce with employees changing jobs more often, increased interest by workers in managing their retirement funds and employers’ desire to retain experienced workers, the minister said. Proposed changes:
– From the day employees join the plan, they will be entitled to the pension benefits they earn under the plan rather than having to wait up to two years. Workers staying in their jobs past the age of 65 and choosing to defer receiving their pension would see their benefits increase when they do retire.
– Plans would no longer be able to apply excessive pension reductions when workers retire early.
– Workers nearing retirement would be able to work reduced hours and continue pension contributions while collecting partial pension benefits. This phased retirement would support workforce renewal and mentoring; and,
– Pension plans can offer members options to buy flexible benefits such as enriched early retirement benefits and cost-of-living adjustments.
Increasing accountability, expanding reporting requirements and ensuring input from pension plan members and retirees in the management of plans would provide increased transparency, Howard said. For example:
– For most plans with 50 members or more, workers and retirees would have representatives on newly required pension committees providing members with greater input into pension plan administration.
– A new provision would allow members and employers to decide how to distribute the surplus.
Measures are being taken to bring greater security to pension benefits now and in the future, the minister said.
– Spouses or common-law partners of deceased pension plan members would be allowed to waive entitlements to payments, allowing others such as children to receive the funds.
– A number of new provisions would bring clarity and greater equity to calculating the amount of pension available to spouses or common-law partners after a relationship breakdown and Manitoba will now recognize court orders from other provinces.
– Employers opting to temporarily cease making contributions into plans would have to maintain a minimum surplus of five per cent of plan liabilities.
– Employer contributions would be required to be made monthly instead of quarterly, improving the financial position of plans.
Manitoba has the second-highest pension plan coverage in Canada with 46 per cent of the paid labour force participating while the national average is only 39 per cent. Manitoba is the only province to require that all employees belong to a pension plan, when one is offered.
“Working Manitobans and those planning for retirement will see greater flexibility and protection of pension plans and that their views from previous consultation have been heard,” said Howard.
For more information on Manitoba’s Pension Benefits Act and regulation go to www.gov.mb.ca/labour/pension/.