May 25, 2011
Changes under the Pension Benefits Act will provide some pension plans in the public sector and broader public sector with temporary solvency funding relief.
In exchange for changes that would make plans more sustainable in the long run, a new regulation provides certain pension plans with temporary solvency funding relief. This relief allows plan sponsors to make lower payments into their pension plans for a fixed number of years while negotiating and implementing plan changes – such as higher member contribution rates and/or lower benefits earned in the future.
The relief will help to protect front-line services and avoid diverting crucial operating dollars to fund pension deficits. There are no new costs to the government or the broader public sector as a result. Without these changes, some public sector plan sponsors would have had to make significant special payments to finance their solvency deficiencies – being forced to cut back on services they provide and/or lay off staff.
As reaffirmed in the 2011 Budget - Turning the Corner, the McGuinty government is committed to modernizing Ontario's pension system, and playing a leading role in national discussions on the retirement income system to help Ontario families.
Read the new regulation on Ontario’s e-Laws website.
Read the government’s August 2010 backgrounder on reforms to provide temporary solvency funding relief.
Read the government’s proposed specific sustainability targets for public sector and broader public sector pension plans to qualify for temporary solvency funding relief.
See the pension and retirement income system reforms that the McGuinty government has undertaken.
FOR MEDIA INQUIRIES ONLY:
- 30 -