Manitoba and Nova Scotia not moving forward with new Target Benefit Plan design

July 10, 2019
Hands protecting a piggy bank.


In fall 2017, Nova Scotia, followed 6 months later by Manitoba, announced consultations on defined benefit plans reform. Both consultations took a soup-to-nuts approach to pension topics, including funding framework and regulatory issues that would affect defined benefit and defined contribution pension plans.

They both also considered introducing regulations that would allow Target Benefit Plans (TBPs) and the conversion of existing benefits to the new plan, being inspired by the New Brunswick government’s approach with so-called “shared risk pension plans”.

In both cases, the National Association of Federal Retirees and its partners in the Canadian Coalition for Retirement Security (CCRS) submitted consultation papers defending defined benefit plans and stated that legislation should not permit the earned benefits from an existing defined benefit pension plan to be unilaterally converted to a target benefit pension plan.

Federal Retirees and CCRS recommended that both the Nova Scotia and Manitoba governments develop a legislative framework that would only permit the introduction of target benefit pensions as new plans or on a forward-looking basis.

In May 2019, the government of Nova Scotia released their report based on the consultations, titled “Improved Funding Framework for Nova Scotia Pension Plans.” The document did not mention target benefit plans at all, and instead focused on reserve accounts, limits on letters of credit and annuity buyouts.

In June 2019 the Manitoba government released their plan which focused on flexibility on solvency and funding – but which also stated that the “minister noted the government is listening to Manitobans and has decided to not move forward with the Pension Commission’s recommendation to permit a new target benefit/shared risk plan design for single employer and multi-employer plans.”

These reports show that united, sustained advocacy and well-crafted policy documents can have a positive influence on government consultations and can protect hard earned defined benefit pension plans. It is however prudent to keep an eye on these situations as we are unable to know what future legislation will be presented.