Regulation - LGIC
Proposed Amendment to Regulation 909 under the Pension Benefits Act - Temporary Solvency Funding Relief for Private Sector Defined Benefit Pension Plans
Regulation Number(s):
Instrument Type:
Regulation - LGIC
Bill or Act:
Pension Benefits Act
Summary of Decision:
Ontario Regulation 161/16 was filed on June 3, 2016.
Further Information:
Consultation draft
PBA
Proposal Number:
16-MOF014
Posting Date:
May 6, 2016
Summary of Proposal:
In the 2015 Ontario Economic Outlook and Fiscal Review and the 2016 Ontario Budget, the government announced its intention to provide private sector sponsors of single-employer defined benefit pension plans with immediate assistance by extending solvency funding relief measures provided in 2009 and 2012 for an additional three years for valuation reports dated in the three-year period starting on December 31, 2015.
Consistent with these announcements, the proposed regulations would provide private sector sponsors of single-employer pension plans with the following options:
• Consolidating existing solvency payment schedules into a new, longer five-year payment schedule.
• Extending the solvency payment schedule to a maximum of 10 years (from the current maximum of five years) for any new solvency deficiency determined in the valuation report in which relief is taken, subject to the consent of plan beneficiaries.
To provide a balanced relief package, previous temporary restrictions on the use of contribution holidays will be reintroduced for a plan fiscal year ending after June 29, 2017 and before January 1, 2020.
Consistent with these announcements, the proposed regulations would provide private sector sponsors of single-employer pension plans with the following options:
• Consolidating existing solvency payment schedules into a new, longer five-year payment schedule.
• Extending the solvency payment schedule to a maximum of 10 years (from the current maximum of five years) for any new solvency deficiency determined in the valuation report in which relief is taken, subject to the consent of plan beneficiaries.
To provide a balanced relief package, previous temporary restrictions on the use of contribution holidays will be reintroduced for a plan fiscal year ending after June 29, 2017 and before January 1, 2020.
Contact Address:
Pension Policy Branch
Temporary Solvency Relief
Ministry of Finance
5th Floor, Frost Building South
7 Queen's Park Crescent East
Toronto, ON
M7A 1Y7
or
pension.feedback@ontario.ca
Temporary Solvency Relief
Ministry of Finance
5th Floor, Frost Building South
7 Queen's Park Crescent East
Toronto, ON
M7A 1Y7
or
pension.feedback@ontario.ca
Effective Date:
July 1, 2016
Decision:
Approved