On February 25, 2016, the Ontario government released its 2016 Budget (the "Budget"). Not surprisingly, the Budget included a number of pension related announcements. In this Communique, we review those announcements.
Ontario Retirement Pension Plan ("RPP")
As expected, the Ontario government confirmed its commitment to the ORPP and its pledge that, by 2020, all eligible workers will be covered by the ORPP or a comparable workplace plan. As reported in our January Labour and Employment Law Communique The Ontario Retirement Pension Plan – An Update, the Ontario government announced a number of ORPP design elements earlier this year. In the Budget, the government confirmed that it will be introducing legislation outlining the design elements in spring 2016. The legislation will focus on employer eligibility, benefit calculations, and the compliance and enforcement regime.
With respect to enrolment in the ORPP, the government indicated that the ORPP Administration Corporation will launch the employer verification and enrolment process in 2017. It also confirmed, as was first announced on February 16th, that the implementation of the ORPP will be delayed by one year from January 1, 2017 to January 1, 2018.
Collaboration on National Pension Solution
In the Budget, the Ontario government reiterated its commitment to work with the federal government and the other provinces and territories on CPP reform as part of a "national pension solution."
Solvency Funding Review and Temporary Solvency Funding Relief
To assist sponsors of single-employer defined benefit pension plans facing funding pressures, the government has initiated a review of the current solvency funding framework. A stakeholder reference group is being established and a consultation paper will be released in spring 2016.
Draft regulations extending temporary solvency funding relief measures for private sector plans, originally introduced in 2009 and 2012, will be posted for consultation in spring 2016.
Target Benefit Multi-Employer Pension Plans
In summer 2015, the government released a consultation paper on target benefit multi-employer pension plans ("MEPPs"). In the Budget, the government committed to continue consulting with affected stakeholders on all aspects of a target benefit MEPP framework.
Additional Legislative Measures
Pension advisory committees ("PACs"): Draft regulations under the Pension Benefits Act to facilitate the establishment of PACs were posted for public comment in the fall 2015. In the Budget, the government indicated that it will be proposing additional legislative changes to enable implementation of PACs and that the regulations will be finalized later this year.
Pooled registered pension plans ("PRPPs"): The government announced that it intends to introduce amendments to the Pooled Registered Pension Plans Act, 2015 to facilitate harmonization with other jurisdictions. Supporting regulations are under development. The government will also be developing an appropriate comparability test for the purposes of the ORPP.
Teachers' Pension Plan Act: The government will be
proposing amendments to this Act in respect of the re-employment
rules.
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.