Additional Temporary Solvency Funding Relief for Employer Sponsors of Public Sector Single Employer Pension Plans (SEPPs)
Regulation - LGIC
Bill or Act:
Pension Benefits Act
Summary of Decision:
Ontario Regulation 307/13, which was approved by the Lieutenant Governor in Council amends certain provisions of Ontario Regulation 178/11 under the Pension Benefits Act. The amendments relate to Stage Two solvency funding relief for certain Ontario public sector pension plans.
October 23, 2013
Summary of Proposal:
The government announced in its 2013 Budget that it "will consider regulatory amendments that provide additional relief of solvency funding obligations for public-sector SEPPs that have taken steps to put their plans on a sustainable track,...".
In accordance with the Budget announcement, the government is proposing the following measure:
Amend Regulation 178/11 under the Pension Benefits Act (PBA) to provide the employer sponsor of a pension plan that has a Stage Two valuation date on or before December 31, 2014, as listed in Schedule 2 of the regulation 178/11, the choice between:
i) Amortizing the solvency deficit identified in the Stage Two valuation report (the solvency deficit) over a period of 10 years (the current provision); and
ii) Making interest-only payments for the first three years of the 10-year period under Stage Two solvency funding relief and amortizing the balance of the solvency deficit over the remaining seven years in equal monthly installments.
BPS Pensions Branch
Ontario Ministry of Finance
Frost Building South, 1st Floor
7 Queen's Park Crescent
Toronto ON M7A 1Y7
November 29, 2013