Human Resources Legislative Update
Ontario to Require Filed Pension Funding and Governance Policies
Date: November 18, 2022
On November 14, 2022, the Ontario government released the 2022 Ontario Economic Outlook and Fiscal Review – Ontario’s Plan to Build: A Progress Update. Included in the plan is, as previously announced in the 2022 Budget, the government’s commitment to consult with stakeholders on proposed regulations necessary for implementing a permanent target benefit framework in Ontario.
On the same date, Bill 36, Progress on the Plan to Build Act (Budget Measures), 2022 (Bill 36) was introduced for first reading.
Among other proposed changes, Bill 36 includes amendments to the Pension Benefits Act (PBA). These amendments to the PBA include the following:
- Sets out the circumstances under which a collective agreement is included as a document that creates and supports a pension plan and therefore must be filed with the pension regulator. The circumstances are: if the plan is established pursuant to the collective agreement; if the collective agreement incorporates the plan by reference in whole or in part; or the terms of the plan are set out in whole or in part in the collective agreement.
- Require that the documents that create and support a pension plan to set out the pension plan’s funding and governance policies. At first, this requirement will only apply to pension plans that provide target benefits, but Bill 36 also contemplates its extension to all pension plans at an unspecified future date.
- Bill 36 provides for transitional measures in both cases to allow pension plan administrators, within the prescribed window of time, to file these policies.
- These policies must satisfy such requirements and contain such information as may be prescribed, and their review will be prescribed by regulation.
The amendments will come into force on a day to be named by proclamation.
Bill 36 also proposes to repeal certain not-yet-in-force sections of the Stronger, Fairer Ontario Act (Budget Measures), 2017 (Act). These sections of the Act are similar to Bill 36’s requirement for funding and governance policies; however, unlike Bill 36’s approach to initially make this a requirement only for pension plans that provide target benefits, the Act would have immediately required all registered pension plans to implement funding and governance policies. The repeal of these sections of the Act would come into force on the day Bill 36 receives Royal Assent.
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