Proposed Amendments to Ontario Regulation 909: Superintendent Consent for Annuity Purchases on Wind Up & Extended Allocation of Payments from the Pension Benefits Guarantee Fund
Regulation - LGIC
Bill or Act:
Pension Benefits Act
Summary of Proposal:
Bill 70, Building Ontario Up for Everyone Act (Budget Measures), 2016 introduced two new provisions into the Pension Benefits Act (PBA). New section 73.1 would prohibit an appointed plan administrator from purchasing life annuities for the purpose of settling benefits in connection with the wind up of the plan without the prior approval of the Superintendent. Where the Superintendent is of the opinion that the annuity purchase would adversely affect the financial position of the Pension Benefits Guarantee Fund (PBGF), he/she may defer giving his approval. In addition, the same Bill introduced paragraph (d.1) to subsection 115 of the PBA which would permit the Lieutenant Governor in Council to make regulations governing the timing and manner of allocating amounts from the PBGF and paying those amounts to pension plans. Regulations are required before these sections can be proclaimed.
The attached proposed regulation would allow the above-mentioned sections to be proclaimed. The proposed regulation outlines that:
• The Superintendent would have the ability to defer approving the purchase of annuities for up to ten years after the approval of the wind up report;
• The Superintendent would have the authority to allocate payments from the PBGF to pay a claim in one or more instalments; and
• An administrator must purchase a life annuity within 60 days of either the Superintendent's approval or when the administrator receives an individual's election or deemed election.
Once proclaimed, these provisions would assist the Superintendent in managing claims against the PBGF in the event of a substantial claim or multiple claims due to an employer(s) becoming insolvent.
August 11, 2017
Comments Due Date:
September 8, 2017
Superintendent Approval to Purchase Annuities Regulations
Pension Benefits Standards, Pension Policy Branch
Ministry of Finance
5th Floor, Frost Building South
7 Queen's Park Crescent East