The Association of Canadian Pension Management is calling on the Alberta government to modernize its provincial pension legislation and align its laws with other Canadian jurisdictions in terms of funding rules, innovation, administration and reducing red tape.
In an open letter to Alberta Finance Minister Nate Horner, the ACPM outlined several proposed legislative changes, based on feedback from Alberta-based plan sponsors.
Read: Alberta’s Smith says she doesn’t see “an appetite” for provincial pension plan
It noted Alberta’s defined benefit pension funding rules lag legislative updates made by other Canadian jurisdictions. Although designed to protect member benefits, the current full solvency funding requirements create volatile contribution requirements, burden Alberta employers and threaten the long-term viability of private sector single-employer DB plans, said the ACPM.
To counter this problem, the ACPM proposed the replacement of full solvency funding with a lower solvency target, as well as requiring funding on an enhanced going-concern basis with required provisions for adverse deviation, shorter amortization periods and plan-specific risk adjustments.
It also cited the use of reserve accounts as a way of supporting going-concern funding and introducing statutory discharge of liability on annuity purchases to eliminate legal uncertainty and encourage responsible de-risking.
The letter also outlined measures that could support defined contribution pension plan sponsors and members, including legislation introducing the use of automatic features such as auto-enrolment and auto-escalation, as well as an expansion of decumulation options for members.
Read: ACPM focusing on flexible pension models, CAPSA guidelines in 2025