Ontario’s long-awaited changes to provide for statutory discharges on the purchase of buy-out annuities are finally in force. The buy-out annuity is a popular risk management mechanism in many jurisdictions, such as the UK and the U.S.
The pace of pension reforms in Ontario has been fast-moving since the release of the Ontario Budget on March 28, 2018. Among other things, the Budget announced continued work on the new funding rules for defined benefit pension plans and related increases to coverage under the Pension Benefits Guarantee Fund, a consultation on a new funding framework for target benefit multi-employer pension plans, consultations regarding new protections for plan members affected by employer insolvencies, and continued work on the new pension and financial services regulator, the Financial Services Regulatory Authority.
Wabush is a welcome decision for third-party lenders to companies with defined benefit pension plans, and employers who sponsor defined benefit pension plans who may have had issues in accessing capital as a result of the SCC decision in Indalex.
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