October 22, 2010 – In September, CARP Action Online reported on pension reforms by the Ontario government aimed at correcting the balance between the interests of employers and employees. This week, the McGuinty government has moved forward with a new Bill that further attempts to address the concerns of workers, retirees, and employees, in what the government is calling the Second Phase of pension modernization.
Bill 120, An Act to Amend the Pension Benefits Act and the Pension Benefits Amendment Act, 2010, which underwent first reading this week, builds on the previous government announcements.
According to the Ministry of Finance, the changes will focus on modernizing the way occupational plans are administered, with the intent to: • Strengthen Ontario’s pension funding rules by requiring more sustainable funding of promised benefits and stronger funding standards for benefit improvements; • Provide a framework to permit more flexible funding rules for certain multi-employer pension plans and jointly sponsored pension plans; • Clarify pension surplus rules and provide a dispute resolution process to allow members, retirees and sponsors to reach agreements on how surplus should be allocated 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; and • Further strengthen regulatory oversight and improve plan administration. The announcement this week focuses on private plans, but the Ministry of Finance has restated its support for “a modest and gradual expansion of the Canada Pension Plan”. And while it remains to be seen just how far ranging and meaningful the Ontario Pension reforms will be when all phases of the rollout are finally introduced, the Ontario government has showed a particular willingness to engage in pension reform and correct long-standing imbalances between employers and employees in occupational plans.
To read our report of earlier reforms, click here
To read the Ministry of Finance news release, click here
To read Bill 120, click here
Keywords: pension reform
