On November 7, 2013, the Ontario government released its
"Economic Outlook and Fiscal Review 2013"
(the Economic Statement). The main features of the Economic
Statement as they relate to the retirement income system are
CANADA PENSION PLAN
Ontario continues to advocate for an enhancement to the Canada
Pension Plan (CPP) and reiterates its prior statement that if an
agreement cannot be reached between the provinces, Ontario
"will move forward with a 'made in Ontario'
solution". In order to amend the CPP, seven of the 10
provinces, representing two-thirds of the population of the
provinces and the federal government, must agree. No further
details are provided in the Economic Statement with respect to what
the 'made in Ontario' solution would be.
PRIVATE-SECTOR PENSION PLANS
With respect to single-employer pension plans, the Economic
Statement indicates the following:
The government plans to implement further funding changes
including limits on contribution holidays and accelerated funding
of benefit improvements
The government intends to draft regulations that would allow
defined contribution plans to pay retirement income directly to
retirees as is envisaged under section 39.1 of the Ontario
Pension Benefits Act
The government has promised to finalize new regulations on
pension splits and asset transfers between pension plans which are
expected to take effect in January 2014.
PUBLIC-SECTOR PENSION PLANS
With respect to public-sector single-employer pension plans, the
government reaffirmed its commitment to:
Continue the movement to 50-50 cost sharing for ongoing
Explore opportunities to seek expansion of joint
sponsorship as a model for pension plan governance and funding in
the public sector
Develop a framework that would, if specified conditions are
met, permit the transfer of assets from single-employer pension
plans to jointly sponsored pension plans and allow certain
single-employer pension plans to merge with or be converted to
jointly sponsored pension plans.
The government also indicated that it is continuing to work with
the technical working group to advance the design, governance, and
transition issues related to the asset pooling framework for
public-sector pension plans in 2014.
In addition, the government indicated it was committed to seeing
changes in the electricity sector pension plans, which would
include cost sharing, governance and other provisions that would
make these plans more affordable.
MULTI-EMPLOYER PENSION PLANS
The Economic Statement indicates that the government intends to
engage with interested parties on a target benefit framework for
eligible multi-employer pension plans in the winter of 2014.
PROVISIONS OF GENERAL APPLICATION
The government will examine the recommendations by the Ontario
Securities Commission relating to mutual fees and financial
advisers and planners.
In addition, the government indicated that it would be engaging
with interested parties in the fall of 2013 on how pooled
registered pension plans should be implemented in Ontario.
Finally, the government indicated that it would be modernizing
the investment rules for Ontario pension plans to:
"Allow pension plans to further invest in Ontario
infrastructure by exempting plans' investments in certain
Ontario public infrastructure projects from the rule limiting
ownership in a single corporation to 30 per cent of voting shares;
Provide plan administrators with greater flexibility to pursue
investment strategies that allow a better match with plan
liabilities, through an exemption to the limit in the current rule
for certain government-issued, inflation-indexed securities (e.g.,
U.S. Treasury Inflation-Protected Securities)."
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