The 2012 Ontario Budget announced a proposed extension of the 2009 solvency funding relief measures to sponsors of private-sector defined benefit plans, in light of the pension funding challenges that resulted from recent declines in long-term interest rates and low investment returns.
Consistent with the provisions introduced in 2009, the proposed solvency funding relief measures would allow plan administrators to elect one or both of the following options, when filing the first actuarial valuation report prepared as of a date on or after September 30, 2011 and before September 30, 2014:
The Budget also announced proposed amendments to regulations under the Pension Benefits Act which would provide plan sponsors with additional pension funding flexibility. The proposed measures would:
The proposed relief measures would be introduced in stages. Ontario Regulation 164/12, which came into effect on June 22, 2012, constitutes the initial stage for implementing the announced solvency funding relief. This first regulation would extend the filing date for valuation reports, prepared as of a date on or after September 30, 2011 and before March 31, 2012, by up to six months until December 31, 2012. This extension in the filing date is intended to provide plan administrators with sufficient time to comply with and reflect the relief provisions in their valuation reports, which must be filed with the Financial Services Commission of Ontario.Subsequent regulations to extend the 2009 solvency funding relief options and to permit the use of letters of credit are planned for the next stages.