A draft regulation on the establishment of target benefit plans (TBPs) — whether new plans, converted defined contribution (DC) plans, or multiemployer-negotiated contribution plans (NCPs) — was published in the Official Gazette on 22 Sep 2021. Comments are invited through 6 Nov 2021. The draft regulation focuses heavily on communication and disclosure to ensure members clearly understand the specific nature of this new type of plan and the associated risk management.
The draft regulation does not include rules applicable to the calculation of transfer values for TBPs. In principle, regular solvency rules would apply — even though the TBP-related provisions of the Supplemental Pension Plans Act would allow for a calculation based on the plan funding. These rules will be important in TBP administration, and it is hoped that more guidance will provide clarification.