News: Greater Flexibility For Some Jointly Sponsored Pension Plans
McGuinty Government's Changes Make Pension Funding More Stable And Predictable

May 26, 2011

Ontario is taking another step toward modernizing pensions.

The government is providing more flexibility for the funding of jointly sponsored pension plans (JSPPs) – a kind of pension plan where risk is shared between employers and employees. Contributions required from members and employers who participate in these plans would be more stable and predictable. Plans would also be required to disclose more information to their members, who as joint sponsors have a say in how their pension plan is governed.

To ensure that plans of different sizes are treated fairly, the government is also simplifying the rules for “solvency concerns”, which determine whether a pension plan must file a valuation report on its financial state every year. Typically, plans must file valuation reports every three years.

Certain JSPPs and specified Ontario multi-employer pension plans (SOMEPPs) will be exempt from “solvency concerns” requirements until December 31, 2012, because these plans are presently not required to fund on a solvency basis. During this exemption period, a different test will be developed to determine when these plans need to file valuation reports annually in the future.

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.

QUICK FACTS

  • These changes are consistent with the report of the Expert Commission on Pensions, which said pension plans with joint governance and risk sharing should be funded according to more flexible rules.
  • The government intends to introduce additional reforms to funding rules, such as strengthening funding for benefit improvements. For more details, please see the August 24, 2010 backgrounder that details proposals to strengthen Ontario's pension system. 
  • The following JSPPs, which existed on August 24, 2010, would have a solvency funding exemption: the Ontario Teachers’ Pension Plan (Teachers’); the Ontario Municipal Employees Retirement System (OMERS); the Healthcare of Ontario Pension Plan (HOOPP); the College of Applied Arts and Technology (CAAT) Pension Plan; the OPSEU Pension Plan; and the Pension Plan for the Employees of OPSEU.

LEARN MORE

Read the Turning the Corner to a Better Tomorrow: the 2011 Ontario Budget

See the pension and retirement income system reforms that the McGuinty government has undertaken.  

Read the new regulation on Ontario’s e-Laws website. 

FOR MEDIA INQUIRIES ONLY:
Andrew Chornenky, Minister's Office, 416-325-9819
Scott Blodgett, Ministry of Finance, 416-325-0324

ontario.ca/finance-news
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