CRA is willing to accept target benefit plans that breach the equal periodic benefit rule

In October 2016 the federal government announced changes to the federal PBSA to permit federally-regulated employers to offer target benefit plans (i.e., plans somewhat like defined benefit plans, but with benefits based on affordability), and various provinces are moving in this direction as well.

CRA indicated that it currently will accept target benefit plans as long as the only rule that is violated is the equal periodic benefit rule (i.e., the benefits would be permitted to fluctuate up and down.) The Department of Finance is working on what changes to the Regulations should be made to accommodate target benefit plans, but has not landed on what these should be.

Neal Armstrong. Summary of 5 May 2017 OBA Seminar, Q.2 under Reg. 8503(2)(a).