OSFI to end freeze on pension plan transfers and loan deferrals
Canada’s banking regulator announced Monday that it plans to phase out changes to private pension plans and credit-related payment deferrals that were introduced earlier this year as protections against the COVID-19 pandemic.
The Office of the Superintendent of Financial Institutions said it plans to end the temporary freeze on portability transfers for private pension plans due to signs of stabilization in the markets, under certain conditions.
OSFI took action in March at the very onset of the pandemic to help protect private pension plans as volatility in North American markets intensified. At the time, OSFI was concerned that transfers out of pension plans would “harm the solvency” of funds.
“The changes announced today are the result of our continued efforts to ensure that our regulatory measures continue to be responsive to this unprecedented situation while remaining risk-based and forward-looking,” the Superintendent of the Department said on Monday. OSFI Jeremy Rudin in a statement for title loans.
In addition to the transfer changes, OSFI also announced new criteria for banks and insurers regarding loan and premium deferrals for distressed borrowers affected by COVID-19.
The new detail of the rules for how long these institutions are subject to the special treatment of capital, which previously allowed some borrowers to have their credit treated as “performing loans” despite the postponement due to COVID-19 issues. Some of the types of credit affected by the new rules include mortgages and insurance premiums, OSFI said.
All previously announced six-month postponements granted before the August 31 deadline will remain under the old regulations. However, referrals granted between August 31 and September 30 will be subject to a three-month extension. Any loan carried over after September 30 will not receive additional special treatment, OSFI said.