This Bill introduced a number of Plan level technical changes that in most cases don’t interest the average person. However, there are two significant changes one already passed and the other to be effective from some date in the future, probably 2012.
- Canada Revenue Agency has relaxed its limits on the surplus threshold. Starting in 2010, Plan Sponsors will be able to contribute with higher surplus thresholds than before. For example, a plan with a $2 Million pension liability will not have to take a contribution holiday until the contributions exceed the lesser of i) the surplus and ii) $500,000. Previously the allowable amount would have been $400,000. The threshold has increased from 20% of liabilities to 25%. This will help Plan Sponsors to better fund their Plans for the future.
- At some date in the future, Federally Registered Pension Plans which include Crown Corporations, Banking & Broadcasting Industries, international or interprovincial transportation, will be bringing in 100% immediate vesting, similar to Manitoba & Quebec.