Further Changes Proposed to New Brunswick Pension Benefits Act

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Further Changes Proposed to New Brunswick Pension Benefits Act

: May 6, 2011

On March 31, 2011, the Government of New Brunswick introduced Bill 16, containing additional amendments to the Pension Benefits Act. Bill 16 modernizes the proposed definitions of common law partners, including same sex couples. It amends legislation passed in 2008, but never proclaimed, that addressed the same subject. Bill 16 will promote harmonization between provinces by bringing New Brunswick into line with the legislation of other provinces in this area. Plan Sponsors will need to review their pension plan text for compliance with the proposed changes.

Bill 16, making changes to the 2008 Act, received first reading in the New Brunswick legislature on March 31, 2011. Among other changes, the Bill significantly revises the definition of “common-law partner” introduced in the 2008 Act.

Under Bill 16, in order to qualify as common-law partners, a plan member and a person not married to the member must have cohabited in a conjugal relationship continuously for at least two years immediately before (i) the death of the member, (ii) the date of the breakdown of the common-law partnership, or (iii) the particular time under consideration in any other case.

The definition of common-law partner was formally introduced with the 2008 Act but it closely followed the definition that had applied previously to unmarried spouses, except that same-sex spouses were now included. Parties had to have cohabited in a conjugal relationship continuously for least three years, during which period one party substantially depended on the other for support. Alternatively, individuals not married to each other would qualify as common-law spouses if they co-habited in a relationship of some permanence but of no minimum time-length if together they were the natural parents of a child. In either case, the parties had to have co-habited within the previous year, although they did not need to be co-habiting at the date of determination.

With Bill 16, the definition of common-law partner is brought more into line with legislation in other jurisdictions. The required period of co-habitation is reduced from three years to two, and the “substantially dependent on the other for support” test has been removed. Parties must now be cohabiting at the time of determination, rather than at some time within the preceding year. The ability to bypass the mandated length of cohabitation where there is a child has been removed.

Presumably the introduction of this bill signals that the government will soon proclaim the changes enacted in 2008, as amended by this bill. Plan sponsors and administrators should begin planning for any required pension plan amendments, communications to members and changes to administrative practices.

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