Bill C-474

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First Reading

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	1st Session, 37th Parliament, 49-50-51 Elizabeth II, 2001-2002
	House of Commons of Canada
	BILL C-474
	An Act to amend the Pension Benefits Standards Act, 1985
Preamble	Whereas it is necessary to ensure that a pension plan is managed in a way that ensures sufficient independence from the employer who establishes it and adequate protection and security for the employees' interests;
	Whereas employees' interests in a pension plan must be protected by a statutory limitation on the proportion of the assets of a pension fund that may be invested in or lent to the employer;
	And Whereas employees who purchase securities of the employer as a part of a defined contribution plan should have the same right to sell or trade in the securities as the directors and officers of the employer and should have timely access to information that might affect the employer's securities;
R.S., c. 32 (2nd Supp.)	Now, Therefore, Her Majesty, by and with the advice and consent of the Senate and House of Commons of Canada, enacts as follows:

	*1. Section 7 of the Pension Benefits Standards Act, 1985* is amended by adding the following after subsection (2):**
Representa- tion of members on board of trustees	(3) Where a board of trustees or other similar body is constituted,
	(a) a minimum of one third of its number must be members or other persons nominated by the members to represent their interests; and
	(b) the members or other persons nominated under paragraph (a) must, if a majority of the retired members so requests, include one retired member.
Directors or officers	(4) A person nominated to serve on a board of trustees or other similar body under subsection (3) must not be a director or officer of the employer.
	2. Section 7.1 of the Act is replaced by the following:
Representa- tion of members on pension committee	7.1 (1) Where a pension committee is constituted,
	(a) a minimum of one third of its number must be members or other persons nominated by the members to represent their interests ; and
	(b) the members or other persons nominated under paragraph (a) must , if a majority of the retired members so requests, include one retired member .
Directors or officers	(2) A person nominated to serve on a pension committee under subsection (1) must not be a director or officer of the employer.
	3. Subsection 7.2(2) of the Act is replaced by the following:
Representa- tion of members on pension council	(2) Where a pension council is established,
	(a) a minimum of one third of its number must be members or other persons nominated by the members to represent their interests; and
	(b) the members or other persons nominated under paragraph (a) must , if a majority of the retired members so requests, include one retired member .
Directors or officers	(2.1) A person nominated to serve on a pension council under subsection (2) must not be a director or officer of the employer.
	4. Section 8 of the Act is amended by adding the following after subsection (4.1):
Assets held in securities	(4.2) No defined benefit plan may hold its assets in securities issued by the employer or by any corporation associated with the employer within the meaning of section 256 of the Income Tax Act to an extent that exceeds ten per cent of the value of the total assets of the plan.
	5. The Act is amended by adding the following after section 8:
Information	8.1 (1) If an employer provides information that affects or is likely to affect the value of its securities to any person other than a director or officer of the employer, it must at the same time provide the information to the administrator of any defined benefit plan it has established and to any person with the power to trade in the securities of a defined contribution plan it has established.
Exception	(2) Subsection (1) does not apply to information provided in confidence to
	(a) a director, officer or manager of the employer in the course of business, or
	(b) a person who provides confidential legal, financial or technical advice to the employer,
	in order to assist the director, officer, manager or person to discharge duties for or provide advice to the employer.
	6. Section 9 of the Act is amended by adding the following after subsection (1):
Restriction on trading	(1.1) A restriction on the power of the administrator of a defined benefit plan or the beneficiaries of a defined contribution plan to sell securities of the employer held pursuant to the plan is void unless it
	(a) prevents the sale of securities for a period of not more than twelve months after their purchase; and
	(b) applies equally at all times to all the directors and officers of the employer.
Not dependent on employer contribution	(1.2) For greater certainty, subsection (1.1) applies whether or not the employer contributes to the employee's purchase of securities through a pension plan.

Bill C-474

BILL C-474