Originally published in Blakes Bulletin on Pension &
Employee Benefits, March 2010
I. TRANSFORMING THE PENSION SYSTEM
The Budget summarized some of the previously announced pension
changes, including Bill 236, which was introduced on December 9,
2009, and the temporary funding relief.
The Budget noted that in 2010: (i) the government will also
consult on regulations related to Bill 133, the Family Statute
Law Amendment Act, 2009, which introduced new rules for the
division of pensions on marriage breakdown; and (ii) to improve the
regulation and administration of multi-jurisdictional pension
plans, legislative amendments will be introduced that would enable
Ontario to become a signatory to a multilateral agreement, joining
Quebec and Alberta as jurisdictions with the legislative authority
to enter into the proposed agreement.
Further, the Budget documents noted that the government will
consider additional temporary funding relief measures for public
sector and broader public sector pension plans –
including universities – if certain conditions related to
greater sharing of risk and governance are met.
II. VISION FOR FURTHER REFORM
The government stated that it will continue the pension reform
building on recommendations from the Expert Commission, feedback
from stakeholder consultations, advice from the Minister's
Advisory Council on Pensions and Retirement Income, and ongoing
discussions with the Canadian Institute of Actuaries. It also
stated that the next stage of reforms will be informed by some
general principles: (i) all plan benefits should be funded; (ii)
risk and responsibility should be shared; and (iii) "funding
rules should match benefit and governance structures".
In the Budget, the government also indicated that it would:
"strengthen the requirements for taking contribution
holidays to ensure greater benefit security and require disclosure
of contribution holidays to plan members and retirees;
enhance the requirements for funding benefit improvements when
existing benefits are not fully funded and require that all benefit
improvements be funded more quickly;
limit the extent to which funding can be based on going-concern
and solvency valuations that exclude the value of certain benefits,
employ asset values that significantly depart from market values,
or smooth interest rates;
further encourage innovative plan design by providing a
framework for "flexible pension plans," as permitted
under the federal Income Tax Act;
permit letters of credit to be used to partially satisfy
solvency funding requirements;
clarify procedures for determining surplus entitlement when a
pension plan winds up; and
set a uniform funding threshold at which annual actuarial
valuations would be required."
As recommended by the Expert Commission, the government also
committed to examine an updated framework for the funding,
governance and regulation of plans that meet specified criteria.
These rules might apply, for example, to certain multi-employer
pension plans and jointly sponsored pension plans.
Ontario also stated that once the investment rules contained in
the federal pensions act are amended, it will decide whether
further investment rule changes, including the 30% rule, are
appropriate for Ontario-registered pension plans.
III. PENSION BENEFITS GUARANTEE FUND
Responding to the increasing challenges faced by the PBGF, the
government is providing a C$500-million grant to the Fund for
2009-10. This grant will help ensure the PBGF has sufficient assets
to cover claims in the near term.
The government commissioned the first independent actuarial
projection study of PBGF premiums and benefits in 2009 and once the
results of this study are available (expected sometime in the
spring of 2010), the government will decide what reform of the PBGF
IV. TOMORROW'S RETIREMENT INCOME SYSTEM
Finance ministries are assessing a range of options to address
the possible future challenges facing the system and expect that
the preliminary options will be available for the May 2010 finance
The options under consideration are summarized as:
expansion of public pensions through the Canada Pension
supplementary defined contribution pension plans;
pension innovations, such as target benefit plans; and
reforms to tax assistance to facilitate higher levels of
retirement savings and additional pension options.
Once these pan-Canadian consultations are completed, the
Province of Ontario looks forward to a national pension summit led
by the federal government in 2010.
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.
Please join members of the Blakes Commercial Real Estate group as they discuss five key provisions of a commercial real estate purchase agreement that are often the subject of much negotiation but are sometimes misunderstood.
Emotional culture is influenced in great part by the mindset and actions of leadership, although employees also play more of a role than they may realize in creating the culture that exists in the group.
The session will be led by Dr. Robert Brooks, an award-winning author and psychologist. In his presentation, Dr. Brooks will describe the mindset and realistic practices of leaders and staff that help to nurture and sustain a culture characterized by positive emotions, satisfying, respectful relationships, a sense of meaning and ownership for one’s work, and enhanced job performance. Examples will be offered to illustrate strategies for developing a positive emotional culture in an organization.
Join leading lawyers from the Blakes Pensions, Benefits & Executive Compensation group as they discuss recent updates and legal developments in pension and employee benefits law as well as strategies to identify and minimize common risks.
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.
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.
On October 13, 2016, the Supreme Court of Canada denied leave to appeal an Ontario Court of Appeal decision which ordered an employer to pay a former employee 37 months of salary and benefits following termination.
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).