Extending Solvency Funding Relief for Private-Sector Pension Plans and Exemptions to the "Solvency Concerns" Test - Strengthening and Modernizing Ontario's Employment Pension System
Regulation - LGIC
Bill or Act:
Pension Benefits Act
Summary of Decision:
O. Reg. 329/12 amends Regulation 909 under the Pension Benefits Act to extend solvency funding relief for private-sector defined benefit (DB) pension plans registered in Ontario, as announced in the 2012 Budget. The regulation makes these relief measures, first enacted in 2009, available for a further three years. This provides DB plan sponsors with flexibility in a challenging economic environment. Plans electing relief are required to provide employees and retirees with additional information about the financial health of their pension plans.
To enable plans to take advantage of the relief amendments, the filing date for reports with a valuation date between September 30, 2011 and May 30, 2012 is extended to February 28, 2013.
The regulation also permits DB plans to amortize going concern and solvency special payments beginning up to one year following a valuation date. This was included as a temporary measure in the 2009 solvency relief and is now permanent, as announced in Budget 2012.
O. Reg. 330/12 defers the dates for repealing certain transition provisions in the "solvency concerns" test, which determines when pension plans must file annual valuation reports. In particular, the regulation exempts plans which currently do not fund on a solvency basis from the solvency concerns test until June 30, 2013. The deferral allows time for consultations, as announced in Budget 2012, regarding a new funding concerns test for plans which do not need to satisfy solvency funding requirements.
These amending regulations came into force on November 1, 2012.
April 18, 2012
Summary of Proposal:
This posting is intended to ensure that interested Ontarians are aware of the announcements in the 2012 Budget, Strong Action for Ontario.
With the unanimous passage by the legislature of two major pension reform packages - the Pension Benefits Amendment Act, 2010 and the Securing Pension Benefits Now and for the Future Act, 2010 - modernization of Ontario's employment pension system is well underway.
Extracts from the 2012 Ontario Budget, Strong Action for Ontario, pages 277 to 280, are attached.
While input is welcome, stakeholders may wish to defer comments until more detailed postings are made.
Pension Policy Branch
Budget 2012 Announcements
Ministry of Finance
5th Floor, Frost Bldg S.
7 Queen's Park Crescent
Toronto, ON M7A 1Y7
November 1, 2012