The Manitoba Government is proposing legislation that adds flexibility to Manitoban’s pensions.
The proposed changes are based on recommendations from the Pension Commission and online feedback.
The more notable changes allow those with money in Manitoba locked-in accounts to unlock funds under certain financial hardships such as medical costs, allow those aged 65 or older to fully unlock their Manitoba locked-in accounts for greater ability to manage their own retirement funds, and allow parties to split pension assets up to 50 per cent based on their circumstances in the event of a relationship breakdown instead of the current format of a 50-50 split or no division.
Right now, employers are required to fund on the basis that 100 per cent of the funds are available to cover obligations of a defined benefit pension plan, should the pension plan terminate and the employer is required to immediately pay out members’ benefits. To reduce the burden on businesses, that would change to 85 per cent.
Employers will be subject to stronger funding requirements on the basis the plan continues to operate indefinitely.
Other proposed changes are removing the requirement for the commission to approve requests for one-time 50 per cent unlocking of a person’s pension funds, in order to reduce red tape, introduce small modernization measures to reduce administrative inefficiencies, and relax the solvency funding rules for a defined benefit pension plan while still providing a level of protection for members’ benefits.
Finance Minister Scott Fielding says these changes are similar to that of other provinces.
