Vol. 150, No. 12 — June 15, 2016
SOR/2016-121 June 3, 2016
POOLED REGISTERED PENSION PLANS ACT
Regulations Amending the Pooled Registered Pension Plans Regulations
P.C. 2016-424 June 3, 2016
His Excellency the Governor General in Council, on the recommendation of the Minister of Finance, pursuant to section 76 of the Pooled Registered Pension Plans Act (see footnote a), makes the annexed Regulations Amending the Pooled Registered Pension Plans Regulations.
Regulations Amending the Pooled Registered Pension Plans Regulations
1 The Pooled Registered Pension Plans Regulations (see footnote 1) are amended by adding the following after section 6:
Designated Provinces and Prescribed Supervisory Authorities
6.1 The following provinces are designated provinces for the purposes of the Act:
- (a) Quebec;
- (b) Nova Scotia;
- (c) British Columbia; and
- (d) Saskatchewan.
Prescribed supervisory authorities
6.2 The following supervisory authorities are prescribed for the purposes of the Act:
- (a) for Quebec, the Autorité des marchés financiers established under section 1 of An Act respecting the Autorité des marchés financiers, CQLR, c. A-33.2;
- (b) for Nova Scotia, the Superintendent of Pooled Registered Pension Plans appointed under section 6 of the Pooled Registered Pension Plans Act, S.N.S. 2014, c. 37;
- (c) for British Columbia, the Superintendent of Pensions appointed under section 4 of the Pension Benefits Standards Act, S.B.C. 2012, c. 30; and
- (d) for Saskatchewan, the Superintendent of Pooled Registered Pension Plans appointed under section 5 of the Pooled Registered Pension Plans (Saskatchewan) Act, S.S. 2013, c. P-16.101.
Exemptions — subsection 7(1) of the Act
6.3 Sections 5, 7, 14 and 16 and subsections 20(3) and (4) of the Multilateral Agreement Respecting Pooled Registered Pension Plans and Voluntary Retirement Savings Plans are exempt from the application of subsection 7(1) of the Act.
2 These Regulations come into force on June 7, 2016.
REGULATORY IMPACT ANALYSIS STATEMENT
(This statement is not part of the Regulations.)
The federal Pooled Registered Pension Plans Act (PRPP Act) applies to PRPPs that are linked to employment that falls under federal jurisdiction. Areas of employment that fall under federal jurisdiction include work in connection with navigation and shipping, banking, inter-provincial transportation and communications, and any work in the Yukon, Northwest Territories or Nunavut. A PRPP is administered by a corporation that holds a PRPP administrator license. The Office of the Superintendent of Financial Institutions (OSFI) is responsible for supervising federally registered PRPPs.
Self-employed individuals and employers in provincially-regulated sectors may also join a PRPP if their respective province has PRPP legislation in place. British Colombia, Alberta, Saskatchewan, Ontario and Nova Scotia have passed PRPP legislation. Quebec has passed similar legislation referred to as the Voluntary Retirement Saving Plans Act (VRSP Act). Provincial pension supervisors would normally supervise the aspects of multi-jurisdictional PRPPs that relate to members in provincially-regulated employment areas, and a single PRPP may be offered by employers in multiple jurisdictions.
In order to streamline the regulation and supervision of PRPPs, section 6 of the PRPP Act allows the Minister of Finance to enter into a multilateral agreement concerning multi-jurisdictional PRPPs with provinces that have passed similar legislation. Under this authority, the federal government and several provinces have negotiated a Multilateral Agreement Respecting Pooled Registered Pension Plans and Voluntary Retirement Savings Plans (PRPP Agreement). Regulatory amendments are required to designate the provinces that can be part of the agreement, and to identify their respective supervisory authorities. The PRPP legislation of some provinces includes similar provisions.
Section 7 of the PRPP Act provides that the provisions of a multilateral agreement have the force of law, i.e. they are equivalent to legislative provisions. This allows the agreement to apply in respect of PRPPs and their administrators, as if the requirements of the agreement were written in the PRPP Act itself.
The objective of this amendment is to support the implementation of the PRPP Agreement by designating the provinces with whom the Minister of Finance can enter into a multilateral agreement with for the supervision of PRPPs, as well as their respective supervisory authorities, and by exempting certain administrative and information sharing provisions of the PRPP Agreement from having force of law (so that they do not have the same legal effect as legislation).
The Regulations Amending the Pooled Registered Pension Plans Regulations (the Regulations) designate British Columbia, Saskatchewan, Quebec and Nova Scotia as provinces that have legislation in force similar to the federal PRPP Act. The Regulations are also amended to designate their respective pension supervisory authorities, namely the Superintendent of Pensions of British Columbia, the Superintendent of Pooled Registered Pension Plans of Saskatchewan, the Autorité des marchés financiers (AMF) of Quebec, and the Superintendent of Pooled Registered Pension Plans of Nova Scotia.
The Regulations also exempt the information sharing and assistance provisions [i.e. sections 5, 7, 14, 16 and subsections 20(3) and 20(4)] of the Multilateral Agreement Respecting Pooled Registered Pension Plans and Voluntary Retirement Savings Plans from the application of section 7 of the PRPP Act, which states that the provisions of such an agreement have the force of law. These provisions deal with the exchange of information between OSFI and its provincial counterparts (e.g. when a supervisor takes certain specific measures, such as revoking a license or transferring the assets of a PRPP), the sharing of supervision and policy information generally (such as changes being considered by the signatory governments to their legislation or regulations), as well as notice if a party decides to withdraw from the agreement.
The “One-for-One” Rule does not apply, as the amendments do not affect administrative costs to business.
Small business lens
The small business lens does not apply, as the amendments do not impose costs on small business.
The governments of British Columbia, Saskatchewan, Quebec and Nova Scotia have participated in the development of a proposed multilateral agreement (the Agreement) for the supervision of PRPPs, which was published for comment on July 15, 2015. All stakeholders who provided comments expressed support for the Agreement. The provinces were consulted on the Regulations and they support them.
The PRPP Act requires participating provinces and their respective pension supervisory authorities to be designated by regulation in order to provide the Minister of Finance with the authority to enter into an agreement for the supervision of PRPPs with these provinces. An Order in Council is being issued to allow the Minister of Finance to sign the agreement, which is ready to be signed by the above-mentioned provinces, pending approval of these Regulations.
For PRPPs with members outside Quebec, the Agreement streamlines supervision by ensuring that plan administrators only need to deal with one supervisor (i.e. OSFI) for the administrator licensing, plan registration, and ongoing plan supervision. The Agreement also streamlines the licensing process for administrators that want to offer PRPPs both in Quebec and in other provinces by establishing that OSFI and the AMF recognize licences issued by each other (with a few conditions in the case of the AMF, i.e. that the applicant be a regulated financial institution, that they pay the licensing fee to the AMF, and provide financial information and a business plan, and obtain liability insurance).
Section 7 of the PRPP Act, which provides that the provisions of a multilateral agreement have the force of law (the same provision exists under the Pension Benefit Standards Act) is intended to allow the federal government to enter into multilateral agreements that go beyond simply exchanging information and delegating administrative duties to pension supervisors. The provision provides for the establishment of requirements in the agreements that have the same effect, and can be enforced in the same manner, as if they had been written in the law itself.
However, the provisions of the PRPP Agreement that deal with information sharing and assistance, including between pension supervisory authorities (i.e. OSFI and its provincial counterparts) are not equivalent to provisions imposing legal requirements on PRPPs and their administrators. It is therefore appropriate that these provisions be excluded from the application of section 7 of the PRPP Act, which would otherwise give these provisions the force of law, as they are administrative arrangements between governments that are not normally written in legislation, and for which the legal recourses available for provisions written in legislation are not necessary. As a result, these matters can be dealt with in an informal manner.
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