News release

New Pension Benefits Act Introduced

Labour and Advanced Education (Jan. 2011 - Aug. 2021)

Private sector pension plan members and retirees would know more about their plans and employers would have more plan design options under the Pension Benefits Act introduced today, Nov. 15.

The Pension Benefits Act governs employer-sponsored pension plans for employees in Nova Scotia.

"This government is committed to building the economy, and creating good jobs and prosperity," said Labour and Advanced Education Minister Marilyn More. "The new Pension Benefits Act would see that personal security and prosperity continue after retirement, and encourage more employers to consider offering a pension plan."

Under the proposed legislation, all plan members would have access to more information about the solvency of their pension plan, what benefits are available and any proposed changes to it.

The previous act recognized two categories of pension plan participants, members and former members. The new act would add retirees as a third category and allow at least two retirees to sit on an advisory committee that makes recommendations to the plan administrator.

The new Pension Benefits Act would give employers more plan design options, which could encourage more to offer pension plans.

Most pension plans in Nova Scotia are either a defined benefit or defined contribution plan. In a defined benefit plan, the administrator promises specific benefits upon retirement and establishes a contribution schedule to provide those benefits. In a defined contribution plan, contributions are made and the administrator buys the best life annuity available when the member retires.

New options would include jointly sponsored pension plans co-sponsored and co-managed by the employer and employees, with both sharing in the plan's benefits and liabilities.

Target benefit plans would combine the qualities of defined benefit and defined contribution plans. They would give employers flexibility in liability and employees a better pension than in a strict defined contribution plan.

The act would also give people in common-law relationships greater access to their partner's pension benefits.

One partner could receive the other's pension if their common-law relationship existed for at least one year and there was no spouse from a previous relationship. If there is a living spouse, the common-law relationship must exist for three or more years, similar to the Canada Pension Plan.

There would also be better protections for people whose partner dies before retiring. The survivor would be eligible to receive all of what the plan member was eligible to receive at the time of his or her death, up from the current 60 per cent.

The department consulted broadly before introducing the legislation. The Pension Review Panel, chaired by former Maritime Life CEO Bill Black, delivered its final report in early 2009. A follow-up discussion paper was released in 2010 and key parties were consulted in 2011.

As of March 31, there were 496 plans registered with the province, representing 107,478 people. About 41 per cent of employed paid workers in the province are members of a pension plans, which is above the national rate of 38 per cent.

The Pension Benefits Act does not apply to employees who work under federal jurisdiction or pension plans established for provincial public servants, teachers, judges, MLAs or Sydney Steel Corporation employees.