Human Resources Legislative Update
Ontario to Introduce Phase II Pension Reforms
Date: August 24, 2010
The announcement indicates that this “broad package of pension reforms” will include:
- modifications to the funding requirements for multi-employer pension plans and jointly sponsored pension plans, including the establishment of a framework for “target benefit” plans of these types;
- requirements for sustainable funding of promised benefits;
- tougher funding standards for benefit improvements, especially where plans are underfunded;
- clarified pension surplus rules, providing a dispute resolution process to allow members, retirees and sponsors to reach agreements on how surplus should be shared on wind up; and
- the implementation of a strategy to build Ontario’s Pension Benefits Guarantee Fund reserves, increase revenues, limit current exposure and reduce risk to taxpayers in the future.
The proposed legislation will also include a number of measures intended to modernize the Ontario pension system, including allowing the use of letters of credit, the introduction of flexible Defined Benefit plans and the payment of variable benefits from Defined Contribution plans.
To learn more about the Expert Commission’s Report, please see our November 20, 2008 FTR Now, Ontario Expert Commission on Pensions Releases Report. Our Pension and Benefits Group will review the government announcement and will soon be posting a news item on Hicks Morley’s website.