The 2010 Ontario Budget was tabled on March 25, 2010. The Budget recognizes the importance of retirement security issues as the population of Ontario ages. The Budget also confirms that the pension reform efforts which began in 2009 will continue in 2010.

The following are highlights of the efforts mentioned in the Budget for modernizing the Ontario pension and retirement income system:

  • Multi-Jurisdictional Regulation. Ontario has been working with other Canadian jurisdictions to finalize an agreement for establishing clear rules for the administration and regulation of multi-jurisdictional pension plans. Ontario is also engaged in an evidence-based assessment of Canada's retirement income system, in partnership with other governments across Canada. Finance ministries are assessing a range of options to address possible future challenges facing the system based on an expert study commissioned by Ontario. Preliminary assessment is expected to be presented at the finance ministers' meeting scheduled in May 2010.
  • Marriage Breakdown. The government will consult, in 2010, on regulations related to Bill 133, the Family Statute Law Amendment Act, 2009, which introduces new rules for division of pensions on marriage breakdown.
  • Solvency Funding Relief and Public Sector Pension Plans. The government will consider additional temporary funding relief measures for public sector and broader public sector pension plans if such plans meet certain conditions related to greater sharing of risk and governance.
  • Further Pension Reform. Efforts to modernize the Pension Benefits Act (Ontario) will continue in 2010. Changes will be implemented in stages to ensure effective coordination and to mitigate cost increases. The next stage of reform is expected to address the following:
    • Funding
      • strengthen the requirements for taking contribution holiday
      • enhance the requirements for funding benefit improvements when existing benefits are not fully funded
      • limit the extent to which the value of certain benefits can be excluded for funding valuations
      • permit the use of letters of credit to partially satisfy solvency funding requirements
      • set a uniform funding threshold for annual actuarial valuation
    • Plan Design – encourage innovative plan design by providing a framework for "flexible pension plan"
    • Surplus Entitlement – clarify procedure for determining surplus entitlement on plan wind-ups
    • MEPPs and JSPPs – examine an updated framework for the funding, governance and regulation of plans that meet specified criteria, e.g., MEPPS and JSPPs
    • Investment Rules – examine the appropriateness of changes to the federal investment rules, once implemented, for Ontario pension plans

  • Pension Benefits Guarantee Fund (PBGF). The government will determine the best steps for reforms that address the future of the PBGF based on the results of an independent actuarial project study which are expected to be available in the spring of 2010. PBGF owed $275 million, as at March 31, 2009, to the Province. The Province is providing a $500 million grant to the PBGF to help ensure that the PBGF has sufficient assets to cover claims in the future.

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