The Financial and Consumer Services Commission of New Brunswick has revised its expectations for pension plan administrators seeking a statutory discharge when annuities are purchased to buy out deferred pensions or pensions, updating elements previously set out in Pension Bulletin 2022-03. Under the revised guidance, administrators should send a purchase notice to each affected individual confirming that an insurance company has purchased the deferred pension or pension and that the benefit is the same as would have been provided under the plan absent the purchase. The notice should also include the purchase date, the insurer’s group policy number and the individual certificate number confirming the purchase, the insurer’s name and contact information, and a statement that if the administrator is discharged under section 33 of the Pension Benefits Act the individual has no further rights or entitlement to payment from the plan, except in certain circumstances where the plan is wound up with a surplus. A post-purchase funding test is also set: on the day after the purchase, the plan’s solvency ratio should be at least 1.0 where the most recently filed actuarial valuation showed a solvency ratio of at least 1.0, or at least the greater of 0.85 and that most recently filed solvency ratio where it was below 1.0; if the test is not met, the employer should contribute within 90 days an amount sufficient to restore the solvency ratio to the applicable threshold. The Commission indicated that additional parameters may be introduced through future regulations and that stakeholders will be notified of further regulatory developments or guidance updates.

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