: Employment Pension System Reform - Frequently Asked Questions

On December 9, 2009, the provincial government announced the next steps in its plan to strengthen and modernize the employment pension system and address the needs of pensioners, plan members and sponsors.

Pension Reform Frequently Asked Questions

Q1: Why is the government announcing pension reform now?

In the 2009 Ontario Budget, the government committed to introduce pension reform legislation in the fall of 2009.

This bill is part of a multi-step process to update and improve the employment pension system.  Further legislation is planned for 2010.

It has been more than 20 years since there has been pension reform of this magnitude in Ontario.  These proposed reforms would help the pension system adapt to economic changes while balancing the need for benefit security.

The government's reforms build on the recommendations in the report of the Expert Commission on Pensions.

Q2: Who benefits from these pension reforms and why?

All participants would benefit from these reforms.

Plan sponsors would be able to more easily complete corporate reorganizations while maintaining pension plan coverage for their employees.  Partial wind-ups would be eliminated and more plan members affected by layoffs be eligible for enhanced benefits. A partial wind-up occurs when only part of a pension plan is closed. 

Plan members and pensioners would have better access to information about their pension plans.  Members would also benefit from the Financial Services Commission of Ontario's enhanced ability to regulate pension plans.

All participants, including the Financial Services Commission of Ontario, which regulates pensions in the province, would benefit from more clarity in requirements for plan administration and the resulting savings in compliance costs.

Q3: What is the government doing for Ontarians who don't have a pension plan? 

The government is assessing the challenges of pension coverage and income adequacy in retirement and talking to other provinces and the federal government to foster an open national dialogue on this important issue.

The Premier has called for a pension summit, which would provide an opportunity to discuss the challenges facing the Canadian retirement income system and the many options that have been presented to address them.

Q4: What has this government already done to reform pensions?

Ontario has already taken significant steps toward pension reform this year by:

  • Providing temporary solvency funding relief, a measure designed to protect jobs and families
  • Simplifying rules for dividing pensions when a marriage ends
  • Establishing an Advisory Council on Pensions and Retirement Income
  • Initiating the first-ever actuarial study of the Pension Benefits Guarantee Fund
  • Providing more resources for the regulator, the Financial Services Commission of Ontario, to improve the protection of pensions
  • Consulting with the Canadian Institute of Actuaries to review actuarial standards and practices to improve pension plan funding
  • Working closely with the federal government and the other provinces to improve the Canadian retirement income system.

Q5: When are the changes in this bill supposed to take effect?

The progress of a bill through the Legislature is really at the discretion of MPPs.  Please continue to check the Legislative Assembly’s web site for updates.

Q6: Will the government continue to consult with stakeholders regarding changes to the pension system?

In 2006, the government established the Expert Commission on Pensions to initiate a province-wide dialogue on pension reform.  The commission held 11 public hearings attended by more than 700 individuals, received 127 written submissions and commissioned 17 research projects.

After receiving the commission's report in 2008, the government solicited comments from stakeholders who provided useful feedback.  The government will continue to consult as pension reform proceeds by posting draft regulations on the Regulatory Register.

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