Regulations Amending Certain Regulations Concerning Pensions

Federally regulated employers and pension plan administrators in sectors like banking, shipping, and inter-provincial transportation — which represent about 7% of private pension plans in Canada — are the primary businesses affected. For defined contribution plans that already offer variable benefits, administrators can now optionally offer the 50% unlocking feature within the plan itself, requiring them to process a new consent form (Form 5.3) but without any mandatory filing with OSFI. For defined benefit plan sponsors, the regulation finally operationalizes the 2019 legislative framework allowing full pension liability transfer to a life insurer via buy-out annuities — meaning employers can get full relief from 'boomerang risk' on those liabilities, which is expected to encourage more annuity purchases to de-risk plans. When a buy-out annuity is purchased, the plan administrator must send written notice to affected former members and survivors within 60 days, using information they already hold, so incremental costs are minimal. Small businesses are not affected, as they do not typically offer defined benefit or large defined contribution plans.