: Savings Targets Set For Public Sector Pension Plans
Further Solvency Relief Dependent on Improved Sustainability

February 10, 2011

Today the McGuinty government proposed specific sustainability targets for public sector and broader public sector pension plans. In order to qualify for temporary pension solvency relief the plans must move towards the targets. The purpose of these measures is to minimize the need for significant solvency deficit payments in the short term and place pension plans on a more sustainable track for the long term.

Plan changes, tailored to specific institutions, could include the following:

converting to joint sponsorship for future service;
more equitable cost sharing of benefits between sponsors and members;
linking some future benefits, such as inflation protection, to plan performance; and
enhancing cost certainty and affordability through benefit adjustments that make plans more sustainable.

Ontarians expect both employers and collective bargaining agents to manage well during tough economic times. Moving towards the targets will be demanding but necessary to preserve the key public services that the people of Ontario expect and deserve.

QUOTES

“By setting these targets, the McGuinty government is strongly encouraging public sector and broader public sector pension plans to take actions to become more sustainable over the long term. They can no longer rely on the Ontario taxpayer for additional funding for their pension deficits.”

Dwight Duncan, Minister of Finance

“These measures will ensure that universities and their employees work together to put pension plans on a sound footing for the future. Government funding will continue to support a quality education for more than half a million students attending Ontario's colleges and universities.”