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Amendments to the Pension Benefits Standards Act
Pension plan administrators and pension consultants are reminded of a change to the vesting provision in the British Columbia Pension Benefits Standards Act (the "PBSA"). The vesting provision has changed from 5 years of continuous employment to two years of continuous plan membership. This change was effective January 1, 1998. The minimum amount of pension for which a member is vested also changed, from post 1992 membership in the plan, to all membership in the plan.
This change resulted from a previously enacted amendment to the PBSA coming into force as scheduled on January 1, 1998. This amendment was contained in section 79 of the Pension Benefits Standards Act, S.B.C. 1991, c. 15, and more recently in section 1 of the Supplement to the Pension Benefits Standards Act, R.S.B.C. 1996, c. 352.
The Pension Standards Branch has recommended to the Legislature that the vesting rule be further modified. The suggested change would provide that vesting occurs upon the earlier of 5 years of continuous employment or two years of continuous plan membership. If passed, this amendm ent would likely take effect retroactively from January 1, 1998.
Pension plans which have a vesting period longer than two years of continuous plan membership will have to be amended effective January 1, 1998.
Two other amendments to the PBSA also came into force on January 1, 1998. One of these amendments provides exemption from the deemed termination provisions of section 48 of the PBSA. This exemption allows plans containing only former members to continue, where the sponsoring employer is still in operation, upon approval by the Superintendent.
The other amendment involves an expanded power in section 5 of the PBSA for the Minister to enter into agreements with other governments in Canada. This expanded power will enable British Columbia to enter into the proposed Multilateral Agreement Between Canadian Pension Supervisory Authorities.
These two amendments were contained in Bill 22, the Miscellaneous Statutes Amendment Act, 1997, which passed Third Reading and received Royal Assent in 1997, with these particular two amendments coming into force on January 1, 1998.
Another amendment to the PBSA allowing pensions in pay to be garnished for unpaid support payments was passed in 1997 but is not yet in force. This amendment was contained in Bill 32, the Family Maintenance Enforcement Amendment Act, 1997, which received Royal Assent on July 28, 1997, and will come into force by regulation likely sometime early this year. This amendment involves a change to section 63 of the PBSA.
Please note: Since the issuance of Bulletin 1 in January 1998, the relevant provisions of Bill 32 have come into force, allowing pensions in pay to be garnished for unpaid support payments.