Proposed Amendment to Regulation 909 under the Pension Benefits Act - Exemption for U.S. government securities from the 10 per cent quantitative limit
Regulation - LGIC
Bill or Act:
Pension Benefits Act
Summary of Decision:
Regulation 51/14 was filed on March 7, 2014.
February 5, 2014
Summary of Proposal:
The government announced in the 2013 Economic Outlook and Fiscal Review that it would be modernizing the investment rules that apply to Ontario-registered pension plans, including regulatory amendments under the Pension Benefits Act to provide plan administrators with greater flexibility to pursue investment strategies that allow a better match with plan liabilities. This posting provides the proposed regulatory amendments to Regulation 909, Pension Benefits Act to implement this.
The proposed regulatory amendments would modify one of the quantitative investment limits that apply to registered pension plans in Ontario, namely the "10 per cent rule", which promotes diversification by restricting a plan administrator from investing more than 10 per cent all of a pension plan's assets in a single entity, or two or more associated entities or affiliated companies.
The proposed amendment would remove this restriction for investments in securities issued and fully guaranteed by the government of the United States of America.
Strategic Pension Reform Secretariat
Ministry of Finance
5th Floor, Frost Building South
7 Queen's Park Crescent
Toronto ON M7A 1Y7
March 7, 2014