: Filing Extension for Certain Pension Plans in the Public Sector and Broader Public Sector

In an effort to support sustainable public sector and BPS pension plans, the Minister of Finance announced in the 2010 Budget that the government would consider providing additional temporary solvency funding relief to certain single employer, defined benefit or hybrid pension plans in the public sector and the broader public sector, including Ontario university pension plans.

The government passed a regulation in May 2011 to provide eligible plans with temporary solvency funding relief.  Two windows for applications to the relief regime have been provided to eligible plans since the announcement on August 5, 2010 based upon the deadlines for filing funding valuations with the Financial Services Commission of Ontario.  A valuation must be filed at least once every three years.  To date, 17 plans have been granted solvency relief under this arrangement.

Ontario Regulation 164/12, which came into effect on June 22, 2012, extends the filing deadlines of the remaining eligible pension plans to allow them to apply for the temporary solvency relief measures during a third window for applications, to be open later in 2012.

The regulation applies to a public sector pension plan that:

  • falls within the definition below:
  • is not a jointly sponsored pension plan;
  • is not a multi-employer pension plan;
  • provides defined benefits;
  • has at least 25% of total membership that are active members as of the valuation date that continue to accrue defined benefits under the plan; and
  • is required to file its valuation report on or after June 30, 2012 and before February 28, 2013.

The regulation extends the filing dates to February 28, 2013 and extends the time for the commencement of special payment schedules established in the report to March 1, 2013.

The temporary solvency relief measures are consistent with the measures announced in the 2012 Budget for single employer, defined benefit pension plans in the broader public sector.  Under the 2012 Budget announcement, the government indicated that it would consider a variety of tools to encourage these plans to implement 50-50 cost sharing within a five year transition period.  Employers would continue to be responsible for plan deficits.  Details about the government’s new 2012 proposal will be announced later in 2012.

These initiatives are designed to make these plans more sustainable and to free up funds that are critically needed for public services. 

A "public sector pension plan" means, a pension plan provided in respect of:

  1. the Crown in right of Ontario, a Crown agency, a corporation, with or without share capital, that is not a Crown agency but is owned, operated or controlled by the Crown, and any other board, commission, authority or unincorporated body of the Crown,
  2. a district school board as defined in subsection 1 (1) of the Education Act,
  3. a person or entity that is a health service provider for the purposes of the Local Health System Integration Act, 2006,
  4. a college of applied arts and technology established under the Ontario Colleges of Applied Arts and Technology Act, 2002,
  5. a university in Ontario, including its affiliated and federated colleges, that receives operating grants from the Government of Ontario,
  6. a municipality as defined in section 1 of the Municipal Act, 2001, and
  7. a children's aid society that is designated in accordance with the Child and Family Services Act.