Ontario legislation clears up pension surplus uncertainty

By David Brown
|Canadian HR Reporter|Last Updated: 12/16/2002

Pension rules proposed by the Ontario government are good news for plan sponsors but have employee groups up in arms.

The proposed changes offer clarification about the payout of pension surpluses during a partial wind up. In any instance where a plan is partially wound up, through a unit closure for example, employers will not be obligated to pay employees leaving the plan any surplus.

This is a favourable change for employers, said Priscilla Healy, a principal with Towers Perrin, and the chair of the advocacy and government relations committee for the Association of Canadian Pension Management. “Now it is clear that you do not have to pay out surplus. The members who are affected will retain rights for full wind up.”