The Ontario government has proposed specific sustainability targets for public sector and broader public sector pension plans. In order to qualify for temporary pension solvency relief, the plans must move towards the targets. The purpose of these measures is to minimize the need for significant solvency deficit payments in the short term and place pension plans on a more sustainable track for the long term, said the government.
“By setting these targets, the (Dalton) McGuinty government is strongly encouraging public sector and broader public sector pension plans to take actions to become more sustainable over the long term,” said Dwight Duncan, Ontario’s minister of finance. “They can no longer rely on the Ontario taxpayer for additional funding for their pension deficits.”
Plan changes, tailored to specific institutions, could include the following:
• converting to joint sponsorship for future service
• more equitable cost-sharing of benefits between sponsors and members
• linking some future benefits, such as inflation protection, to plan performance
• enhancing cost certainty and affordability through benefit adjustments that make plans more sustainable.
Ontarians expect both employers and collective bargaining agents to manage well during tough economic times, said a government release, and moving towards the targets “will be demanding but necessary” to preserve Ontario’s public services.
“These measures will ensure that universities and their employees work together to put pension plans on a sound footing for the future,” said John Milloy, minister of training, colleges and universities. “Government funding will continue to support a quality education for more than half a million students attending Ontario's colleges and universities.”
In August 2010, Ontario universities were offered more time to pay down pension solvency deficits, as long as they took steps to make the pension plans more financially sustainable.
More information can be found at Ontario government.
© Copyright Canadian HR Reporter, HAB Press. All rights reserved.