Regulation - Other
Proposed Amendment to Ontario Regulation 909 under the Pension Benefits Act - Extend for One Year the Temporary Rules for Specified Ontario Multi-Employer Pension Plans
Regulation Number(s):
Instrument Type:
Regulation - Other
Bill or Act:
Pension Benefits Act
Summary of Proposal:
In 2007, temporary provisions, including an exemption from solvency funding, were introduced for eligible multi-employer pension plans (MEPPs) that could reduce benefits. The intention was for these plans operate under temporary rules until a permanent framework for target benefit pension plans was implemented.
The proposed amendments would:
• extend the date on which a plan would no longer have SOMEPP status to the date on which the first report is filed with a valuation date after January 1, 2025, rather than January 1, 2024;
• extend the temporary funding rules, including the reduced solvency funding exemption, by one year from January 1, 2024, until January 1, 2025;
• extend the date that plan administrators could file an election to declare a plan a SOMEPP. The date would be extended until the earlier of the day before section 81.0.2 of the Pension Benefits Act (the proposed permanent legislative framework for target benefit pension plans) comes into force or January 1, 2025, rather than January 1, 2024; and
• extend the temporary exemption from the requirement to file actuarial valuation reports with the regulator annually, rather than triennially, if the plan's solvency funding ratio is less than 85 per cent. The exemption would be extended by one year from January 1, 2024 to January 1, 2025.
In March 2023 the government launched consultations on the proposed target benefit regulatory framework. The proposed regulatory extensions described above are required as an interim step to complete the consultation process and development of the target benefit regulatory regime.
The objectives of the proposed permanent target benefit framework are to strengthen plan governance, improve plan transparency, and support long-term plan sustainability for plan members and employers through funding and governance policies, plan disclosures, and funding requirements.
The proposed amendments would:
• extend the date on which a plan would no longer have SOMEPP status to the date on which the first report is filed with a valuation date after January 1, 2025, rather than January 1, 2024;
• extend the temporary funding rules, including the reduced solvency funding exemption, by one year from January 1, 2024, until January 1, 2025;
• extend the date that plan administrators could file an election to declare a plan a SOMEPP. The date would be extended until the earlier of the day before section 81.0.2 of the Pension Benefits Act (the proposed permanent legislative framework for target benefit pension plans) comes into force or January 1, 2025, rather than January 1, 2024; and
• extend the temporary exemption from the requirement to file actuarial valuation reports with the regulator annually, rather than triennially, if the plan's solvency funding ratio is less than 85 per cent. The exemption would be extended by one year from January 1, 2024 to January 1, 2025.
In March 2023 the government launched consultations on the proposed target benefit regulatory framework. The proposed regulatory extensions described above are required as an interim step to complete the consultation process and development of the target benefit regulatory regime.
The objectives of the proposed permanent target benefit framework are to strengthen plan governance, improve plan transparency, and support long-term plan sustainability for plan members and employers through funding and governance policies, plan disclosures, and funding requirements.
Analysis of Regulatory Impact:
The proposed amendments would not affect participating employers, members, retired members, and former members of SOMEPPs, as the regulatory provisions are currently in effect and would be extended for one year.
Further Information:
Proposal Number:
23-MOF012
Posting Date:
July 21, 2023
Comments Due Date:
September 4, 2023
Contact Address:
Pension Policy Branch
Ministry of Finance
5th Floor, Frost Building South
7 Queen's Park Crescent East
Toronto, ON M7A 1Y7
or
pension.feedback@ontario.ca
Ministry of Finance
5th Floor, Frost Building South
7 Queen's Park Crescent East
Toronto, ON M7A 1Y7
or
pension.feedback@ontario.ca