Government of Canada’s Budget 2022

On April 7, 2022, the federal government released Budget 2022: A Plan to Grow Our Economy and Make Life More Affordable (Budget 2022), which includes several proposed initiatives involving federally regulated pension plans. Budget 2022 announces that the federal government:

• intends to move forward with requirements for disclosure of environmental, social, and governance (ESG) considerations, including climate-related risks, for federally regulated private pension plans.
• proposes to amend the Pension Benefits Standards Act, 1985 (PBSA) and the Pooled Registered Pension Plans Act to improve the sustainability and long-term security of federally regulated pensions for all plan members and retirees through improved governance and administration and new frameworks for solvency reserve accounts and variable payment life annuities.

On April 28, 2022, the Government of Canada tabled Bill C-19, An Act to implement certain provisions of the budget tabled in Parliament on April 7, 2022 and other measures (the Budget Implementation Act, 2022, No. 1 or BIA 1). BIA 1 includes amendments to the PBSA:

• to require plan administrators to establish a governance policy for all federally regulated private pension plans.
• to establish a framework for solvency reserve accounts.
• to permit regulations to be made respecting the investment of the assets of a pension fund, allowing regulations to be made to require disclosure of ESG considerations.

Please note that the changes regarding governance policies and solvency reserve accounts are not expected to be brought into force until associated changes to the Pension Benefits Standards Regulations, 1985 are implemented.

The additional initiatives mentioned in Budget 2022 involving federally regulated private pension plans may be included in a future budget implementation act.