The Ontario government has announced upcoming changes to the province's pension system, including tougher funding standards and clearer rules around pension surpluses.
Ontario regulates about 8,350 defined benefit pension plans, which comprise more than 40 per cent of all registered pension plans in Canada. The proposed changes, which follow a package of reforms passed in May, will go before the legislature in the fall.
"To ensure Ontarians have a strong retirement income system, we need our pension system to be stable and sustainable," said Minister of Finance Dwight Duncan.
The proposed reforms address almost 40 of the 144 recommendations from the Expert Commission on Pensions and would:
• Strengthen Ontario's pension funding rules by requiring sustainable funding of promised benefits and tougher funding standards for benefit improvements.
• Clarify pension surplus rules and provide a dispute resolution process to allow members, retirees and sponsors to reach agreements on how surplus should be shared on wind up.
• Provide a more sustainable pension benefits guarantee fund by implementing a strategy to build reserves, increase revenues, limit current exposure and reduce risk to taxpayers in the future.
"I'm pleased to see that the government is continuing to implement a number of necessary improvements to the security and affordability of Ontario's workplace pension plans," said Harry Arthurs, chair of the Expert Commission on Pensions.
The province also supports a modest expansion of the Canada Pension Plan and is involved in talks with other governments to find ways to lower costs and facilitate access to defined contribution plans.
© Copyright Canadian HR Reporter, Thomson Reuters Canada Limited. All rights reserved.