Building on pension reforms passed earlier this year, the
Ontario government announced a second set of reform proposals on
August 24, 2010. Key areas of reform include adjustments to funding
and investment rules and changes to the Pension Benefits Guarantee
The new proposals aim to clarify the rules regarding plan
surplus, permitting contribution holidays and reasonable plan
expenses to be paid from the pension fund unless prohibited by the
plan terms. However, we have been advised that the government is
still considering whether current plan terms will be determinative,
or if historical plan terms will need to be considered as well.
The new proposals include a plan to parallel the federal
government's recent changes to its pension fund investment
rules. The Ontario government also pledged to continue reviewing
the appropriateness of the 30% rule, but for now, the rule remains
A multi-part strategy was proposed to mitigate the financial
risks of the PBGF. While the PBGF already received a $500 million
government grant earlier this year, the government also plans to
increase PBGF revenue by increasing employer premiums, including
raising the base fee per plan member from $1 to $5, raising the
maximum fee per plan member in underfunded plans from $100 to $300
and eliminating the overall assessment cap for underfunded pension
plans. Further proposals include extending the exclusion period
from three to five years for new plans and benefit enhancements.
The government is not proposing to increase the maximum monthly
top-up of $1,000 per member at this time.
There are several other notable proposals. Jointly Sponsored
Pension Plans will enjoy more funding flexibility, as they will no
longer be required to fund plans on a solvency basis, provided that
certain requirements are met (including enhanced member and retiree
disclosure). The proposed arbitration process for surplus
distribution on plan wind up is also an interesting concept,
however, the mechanics of this process have not been disclosed at
this time. The government has also proposed requiring that the
Pension Benefits Act be reviewed every five years.
We have been advised that these proposals will be subject to an
as-yet undisclosed transition period. Regulations providing greater
detail regarding these proposals will also be forthcoming.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
Unfortunately, reasonable accommodation for employees in the workplace continues to be the source of significant litigation and even today we continue to see outrageous examples of employers behaving badly.
A former teacher at Bodwell High School has learned a valuable lesson from the B.C. Human Rights Tribunal— it is not discriminatory for an employer to offer child-related benefits to only employees with children.
We are now beginning to see reported cases involving charges and subsequent fines laid against employers for failing to provide information, instruction and supervision to protect a worker from workplace violence.
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).