News: Providing Eligible Pension Plans Temporary Solvency Funding Relief
McGuinty Government's Changes Will Lead To More Sustainable Pension Plans

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.

4QUICK FACTS

  • This framework is voluntary.  Employers are not required to participate. Plan changes may require an agreement with collective bargaining agents.
  • In August 2010, the government announced that temporary solvency funding relief would be provided to certain public sector pension plans, including universities.
  • On February 10, 2011, the government posted on the Regulatory Registry the details of temporary solvency funding relief measures for public sector and broader public sector pension plans. The registry indicated that there would be no additional funding from the province to finance pension deficits.
  • Eligible pension plans will have several windows of opportunity to apply for temporary solvency funding relief. Those pension plans that met the criteria for temporary solvency funding relief during the first window of opportunity are named in Schedule 1 of the regulation. Future windows will be announced at a later date.

LEARN MORE

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:
Darcy McNeill, Minister’s Office, 416-325-8679
Scott Blodgett, Ministry of Finance, 416-325-0324

ontario.ca/finance-news
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