Effective November 1, 2012, Ontario has extended its solvency
funding relief measures applicable to private sector pension plans.
Temporary solvency relief measures were put into place in Ontario
in 2009. Some of these measures have now been extended and certain
new measures have been introduced.
The regulations provide for the following measures with respect
to the first actuarial valuation report filed by the administrator
with a valuation date between September 30, 2011 and September 30,
Extension of the prior measure allowing the deferral for up to
one year of the commencement of special payments for any new
solvency or going concern deficiency. (Option 1)
Extension of the prior measure allowing an election to be made
to consolidate existing solvency special payments into a new 5 year
schedule for the liquidation of the deficiency. (Option 2)
Extension of the prior measure which permits an election to
extend the solvency special payment schedule from 5 years to up to
10 years, subject to certain member consent requirements. (Option
An election may be made to consolidate existing special
payments in respect of solvency deficiencies including special
payments that were previously consolidated under the prior measures
(excluding certain special payments, including those that were
previously extended to up to 10 years under the prior measures)
into a new 5 year payment period for the liquidation of the
deficiency. (Option 4)
An election may be made to extend the solvency payment period
for new solvency deficiencies to up to 10 years (instead of 5
years). This election may be made even if an election to extend the
solvency payment period was made under the prior measures. The new
election will apply to new deficiencies in the valuation report. In
order to implement this election, member consent is required (no
more than 1/3 of eligible members, former members or retired
members may object). (Option 5)
Options 1, 2 and 3 are extensions of existing measures. Options
4 and 5 are new measures.
The regulations also provide for a filing extension for
actuarial valuation reports with a valuation date on or after
September 30, 2011 and prior to May 31, 2012. These reports may be
filed up to February 28, 2013.
There are restrictions in the regulations related to funding of
benefit improvements if certain options are elected. In addition,
where an election is made there are enhanced disclosure
requirements under the regulations.
There are plans that are excluded from these regulations,
including specified Ontario multi-employer pension plans and
certain plans that are the subject of specific regulations.
The content of this article does not constitute legal advice
and should not be relied on in that way. Specific advice should be
sought about your specific circumstances.
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