Proposed Pension Act Amendments Could Reshape JSPP Transfer Framework Ontario

On November 6, 2025, Ontario Bill 68, the Plan to Protect Ontario Act (Budget Measures), 2025 (No. 2) (Bill 68) was introduced for first reading.

Bill 68 introduces a number of amendments to the Pension Benefits Act (the PBA) that set out rules governing the conversion of a single employer pension plan that provides defined contribution (DC) benefits into a jointly sponsored pension plan (JSPP). The new rules also introduce a framework for enabling members to use their pre-conversion DC balances towards the purchase of pension credits in a JSPP. These proposed amendments provide long-awaited guidance on the conversion of both DC plans and plans with DC components to JSPPs.

The bill also expands the PBA rules governing successor plans to include JSPPs, introduces funding obligations on JSPP participating employers upon the wind up of a JSPP or the employer’s withdrawal, and permits the adoption of regulations to provide that special payments required in respect of JSPP successor plans may be reduced or cancelled if certain conditions are met.

Upon passage of the bill, these new rules will provide Ontario employers that sponsor single employer pension plans with new options when de-risking and consolidating their retirement savings benefit offerings.

DC to JSPP Conversions

Bill 68 introduces new sections to the PBA, setting out rules that apply where the sponsor of a single employer pension plan that provides DC benefits seeks to convert the plan into a JSPP.

The new provisions permit active, former and retired members and other beneficiaries of a single employer DC plan or a combination defined benefit (DB)/DC plan to elect not to transfer their DC assets to the JSPP as part of the conversion. Instead, such individuals will be able to direct the administrator to allow them to transfer the account balance to a prescribed retirement savings arrangement or pension plan, or use it to fund an annuity purchase. Individuals who do not provide such direction within a prescribed period will be deemed to have consented to the transfer of assets relating to their benefits as part of the conversion.

The new sections also create requirements regarding:

good faith consultations about the proposed conversion and transfer of assets;
requirements to provide notice to active, former and retired members and other beneficiaries and the Financial Services Regulatory Authority of Ontario (FSRA) about the proposed conversion and transfer of assets; and
the transfer of assets as part of the conversion.

The new provisions also provide for a discharge of the administrator of the single employer pension plan upon the transfer of assets in accordance with the PBA.

Special Individual Transfers

A new section of the PBA will allow the sponsor of a single employer plan that provides DC benefits to enter into an agreement with a JSPP administrator to facilitate the transfer of DC assets to the JSPP.

This new provision provides that a member entitled to DC benefits may require the transfer of the member’s DC account balance to the JSPP in the following circumstances:

The sponsor of the single employer plan becomes a participating employer in a JSPP.
The employer ceases making contributions to the DC provision of the single employer plan.
The employer and the JSPP administrator have entered into an agreement to facilitate the transfer of DC assets.
Any other prescribed conditions are met.

The new provision also sets out the rules that apply to these transfers, including:

notice to FSRA about the agreement between the employer and the JSPP administrator to facilitate the transfer of DC assets, which must be given within a prescribed period, and which must contain the agreement and such other prescribed information;
notice to a member entitled to DC benefits about their entitlement to require the administrator of the single employer plan to transfer the DC assets to the JSPP, in accordance with prescribed requirements and containing specified information enumerated in the section; and
the rules governing the transfer of assets as part of the conversion.

A member can exercise the transfer entitlement by delivering a direction to the administrator. The period in which the member is required to deliver this direction and the effective date of the transfer are to be determined according to the agreement between the employer and the JSPP administrator. If the agreement does not specify a time period for delivering the direction and/or the effective date of the transfer, these will be determined in accordance with regulations.

Such transfers are exempt from the PBA’s restrictions on retroactive adverse amendments and the notice requirements that apply to adverse amendments.

DC assets transferred to a JSPP pursuant to this section are required to be used to purchase pension credits in the JSPP to the extent permitted under the Income Tax Act (Canada), with amounts in excess of the income tax limits paid into a prescribed retirement savings arrangement to the extent permissible or paid as a cash lump sum. Upon the transfer of the DC assets to the JSPP, the member ceases to be entitled to DC benefits under the single employer pension plan.

Application of Successor Plan Rules to JSPPs

Bill 68 also extends the rules that apply when a successor pension plan takes the place of another pension plan to JSPPs.

JSPP Solvency Funding Relief Measures

A new subsection contemplates the adoption of regulations providing that special payments required in respect of a JSPP successor plan may be reduced or cancelled if certain conditions are met. The new provisions will apply if,

a) the successor pension plan is a JSPP in which the sponsors do not have an obligation under the PBA or regulations to make contributions in respect of any reduced solvency deficiency, and

b) before the effective date of the transfer of assets, the original pension plan has a going concern unfunded liability or reduced solvency deficiency and the sponsors of the original pension plan are required to make contributions in respect of any reduced solvency deficiency under the PBA and regulations.

The cancellation or reduction of the amount of special payments may apply only to the requirement to make special payments on or after the effective date of the transfer of assets.

Funding Obligations Upon Withdrawal of Participating Employer

A new subsection is added to the PBA’s successor plan rules creating a funding obligation upon the withdrawal of a participating employer in a successor JSPP.

The new provision applies to employer that has,

a) transferred assets to a JSPP from a single employer DB plan or from a single employer combination DB/DC plan; and

b) became a participating employer in a JSPP that is a successor to the JSPP to which the transfer described in (a) was made.

If, after the transfer of assets, the employer withdraws as a participating employer in the successor JSPP, the employer will be required to pay a prescribed amount into the pension fund of the successor JSPP for the benefit of the active, former and retired members and other beneficiaries who were entitled to benefits from the original single employer pension plan immediately before the effective date of the transfer of assets from the single employer plan to the JSPP.

Liability of JSPP Participating Employer on Wind Up

In addition, the PBA rules governing the liability of employers upon the wind up of a pension plan are amended to address the wind up of a successor JSPP. The new provisions provide that, if,

a) an employer has transferred DB assets to a JSPP or has converted a single employer pension plan into a JSPP by amending the pension plan;

b) the assets are subsequently transferred from the JSPP to another JSPP under the PBA’s successor plan rules to another JSPP; and

c) the successor JSPP is subsequently wound up.

The employer must pay a prescribed amount into the pension fund of the wound up JSPP for the benefit of the active members, former and retired members and beneficiaries entitled to benefits under the single employer pension plan immediately before the effective date of the original transfer of assets or conversion.

If the amount paid pursuant to this new requirement and the money allocated from the pension fund of the wound up JSPP are not sufficient to pay all the pension benefits owing under the single employer pension plan immediately before the effective date of the transfer of assets or conversion, as applicable, the benefits will be reduced in the prescribed manner upon the wind up of the JSPP.

Coming into Force

Upon the passage of Bill 68, the new PBA provisions governing DC to JSPP conversions will come into force on a day to be named by order of the Lieutenant Governor in Council. These changes provide welcomed guidance to employers and plan administrators contemplating such conversions.

Our pensions, benefits and compensation team will continue to monitor this bill and provide updates as they become available. For practical guidance on how these proposed amendments may affect your employee programs or pension obligations, please connect with a member of our team.

The article in this client update provides general information and should not be relied on as legal advice or opinion. This publication is copyrighted by Hicks Morley Hamilton Stewart Storie LLP and may not be photocopied or reproduced in any form, in whole or in part, without the express permission of Hicks Morley Hamilton Stewart Storie LLP. ©

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Proposed Pension Act Amendments Could Reshape JSPP Transfer Framework

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