On June 24, 2020, Alberta's Superintendent of Pensions issued EPPA Update 20-04 respecting certain additional COVID-19 related relief measures set out in Order in Council 190/2020, also filed on June 24. As described in the update, the Order in Council makes the following amendments to the Employment Pension Plans Regulation (EPPR) respecting funding and electronic communications:
- Temporary Suspension of Special Payments: A new section 10.2 is added to the EPPR to permit a temporary suspension of unfunded liability and solvency deficiency payments (special payments) until the end of 2020 for defined benefit (DB) and target benefit pension plans. For many plans, this relief will result in a suspension of a portion of required contributions, thereby allowing employers (and members, in the case of contributory DB and target benefit plans) to retain and reallocate those amounts during the temporary suspension period.
Any experience losses attributable to the reduced contributions on account of this temporary relief must be identified in the next actuarial valuation report of the plan. The experience loss must be amortized over a period not exceeding 15 years.
- Temporary use of Actuarial Excess: A new section 10.3 is added to the EPPR to permit DB plans to temporarily increase the portion of funding excess that can be used to reduce or eliminate contributions which would have been and/or will be required to fund benefits, for a single fiscal year.
This change impacts DB plans which are more than 105 percent funded on a going concern basis, since the funding excess, referred in the EPPR as “accessible going concern excess”, may be used to reduce or eliminate current service contributions. The ability to apply accessible going concern excess towards the reduction or elimination of current service contributions has been temporarily increased from 20 to 40 percent of the excess for a single fiscal year ending no later than December 31, 2021.
- Exemption from a Provision for Adverse Deviation: New section 10.2 to the EPPR also provides collectively bargained multi-employer plans (CBMEPs), which are otherwise required to include a Provision for Adverse Deviation (PfAD) for contributions remitted in 2020, an exemption from applying the PfAD on current service contributions. This applies to actuarial valuations with effective dates on or before December 31, 2019. For most CBMEPs, this relief is expected to reduce funding obligations rather than result in a suspension of contributions.
Access to each of these temporary relief measures require that the plan administrator apply to and obtain consent from the Superintendent of Pensions (Alberta) (Superintendent) by no later than December 31, 2020. Approval may be retroactive, but cannot begin any earlier than the day these new provisions come into force.
An application must confirm that no benefit improvements will be made to the plan while participating in the funding relief. The estimated financial position of the plan (both going concern and solvency) as of the date of application, as well as the rationale for seeking funding relief, must also be included. Finally, the Superintendent may impose any other terms or conditions that may be considered appropriate before granting approval.
A new subsection 156.1(1) is added to the EPPR to explicitly permit a statement, notice, document, or other record or information that is required or permitted under the Employment Pension Plans Act (Alberta) or its regulations may be provided, sent, delivered, or filed in electronic form (subject to, and in accordance with, applicable requirements of Alberta’s Electronic Transactions Act). This amendment to the EPPR, and the corresponding authority to use electronic documents and records, is permanent. However, hard copies of statements, notices, documents and other records or information are still required to be available upon request.
It should be noted that, pursuant to subsection 156.1(2) of the EPPR, the authority provided to issue documents in electronic format does not apply to the designation of beneficiaries.