Regulation - LGIC
Solvency Funding Relief for Certain Public Sector Pension Plans
Regulation Number(s):
118/14
Instrument Type:
Regulation - LGIC
Bill or Act:
Pension Benefits Act6
Summary of Decision:
Approved.
Further Information:
118/14
Proposal Number:
14-MOF016
Posting Date:
Summary of Proposal:
Seven public-sector single-employer pension plans were added to Schedule 2 of the Regulation, enabling them to progress to Stage 2 of the Public Sector Solvency Relief Program.
The names plans are as follows:
1. Contributory Pension Plan for Hourly-Rated Employees of McMaster University including McMaster Divinity College
2. Carleton University Retirement Plan
3. The Contributory Pension Plan for TUFA Employees of Trent University
4. Retirement Plan of University of Guelph
5. Pension Plan for Professional Staff of University of Guelph
6. York University Pension Plan
7. The Royal Ontario Museum Pension Plan
At the end of Stage 1 relief, the above plans submitted satisfactory reports (Stage 1 progress report) to the Ministry. Meeting the requirements for entering Stage 2 relief, the plans demonstrated that they had reached the necessary agreements to amend their plans so as to improve long-term sustainability. These agreements enable the plan to make substantial progress towards the predetermined savings targets developed in Stage 1 relief.
Entry into Stage 2 relief allows the plans to amortize their solvency deficiency over a period of up to ten years, rather than the usual five. The plans also have the option of making interest only payments during the first three years of the relief period and amortizing the balance over the remaining seven years.
In addition, a technical amendment to the Regulation was made to clarify that any actuarial gains on a solvency basis can be used to reduce either:
- the solvency payments established in the Stage 2 valuation report; or
- the amortization periods.
The names plans are as follows:
1. Contributory Pension Plan for Hourly-Rated Employees of McMaster University including McMaster Divinity College
2. Carleton University Retirement Plan
3. The Contributory Pension Plan for TUFA Employees of Trent University
4. Retirement Plan of University of Guelph
5. Pension Plan for Professional Staff of University of Guelph
6. York University Pension Plan
7. The Royal Ontario Museum Pension Plan
At the end of Stage 1 relief, the above plans submitted satisfactory reports (Stage 1 progress report) to the Ministry. Meeting the requirements for entering Stage 2 relief, the plans demonstrated that they had reached the necessary agreements to amend their plans so as to improve long-term sustainability. These agreements enable the plan to make substantial progress towards the predetermined savings targets developed in Stage 1 relief.
Entry into Stage 2 relief allows the plans to amortize their solvency deficiency over a period of up to ten years, rather than the usual five. The plans also have the option of making interest only payments during the first three years of the relief period and amortizing the balance over the remaining seven years.
In addition, a technical amendment to the Regulation was made to clarify that any actuarial gains on a solvency basis can be used to reduce either:
- the solvency payments established in the Stage 2 valuation report; or
- the amortization periods.
Contact Address:
Broader Public Sector Pensions Policy Brach
Ministry of Finance
1st Floor, Frost Building South
7 Queen's Park Crescent
Toronto ON M7A 1Y7
Ministry of Finance
1st Floor, Frost Building South
7 Queen's Park Crescent
Toronto ON M7A 1Y7
Effective Date:
July 1, 2014
Decision:
Approved