Manitoba businesses and charities will be temporarily exempt from putting some money into pension plans in a bid to free up capital during the COVID-19 pandemic.
The waiving of certain pension payments will last for the remainder of 2020 and all of 2021, Finance Minister Scott Fielding said in a news release.
“Many businesses are facing challenges due to the current economic environment and lost revenue due to COVID-19,” Fielding said.
“A moratorium on certain pension payments is a temporary change we can make to support businesses and their employees that will allow businesses to reinvest these funds to keep their employees at work.”
Spared from mandatory payments
These businesses and charities will be excused from making unfunded liability and solvency deficiency payments, which employers are normally required to make under defined benefit pension plans.
“One of the major concerns for plan sponsors, who are not exempt from solvency funding, is the impact and uncertainty of the historically low interest rates on their special payments for the new year,” said Tim McGorman, principal at Ellement Consulting Group, in the news release.
“This temporary measure will assist these businesses to manage their staffing and business operations in 2021 without the additional stress and uncertainty that additional pension funding requirements would have on their business operations.”
Fielding said he hoped the additional money will prevent layoffs at businesses.
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