Canada's banking regulator has announced that it is ending changes to private pension plans and credit-related payment deferrals that were introduced earlier this year as safeguards during the COVID-19 pandemic.
The Office of the Superintendent of Financial Institutions (OSFI) said that it will end the temporary freeze on portability transfers for private pension plans due to signs that markets have stabilized.
OSFI took action in March amid the early days of the pandemic to help protect private pension plans as volatility in North American stock markets grew. At the time, OSFI was concerned that transfers out of pension plans would "impair the solvency of the funds."
In addition to the transfer changes, OSFI also announced new criteria for banks and insurers regarding loan and premium payment deferrals for troubled borrowers impacted by COVID-19.
The new rules outline how long those institutions are subject to special capital treatment, which previously allowed certain borrowers to have their credit treated as "performing loans" despite being deferred due to COVID-19-related issues. Some of the types of credit impacted by the new rules include mortgages and insurance premiums, OSFI said.
Any of the previously announced six-month deferrals 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 loans with deferrals after September 30 will not be subject to further special treatment, OSFI said in a news release.
