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.
Employers that sponsor defined benefit (“DB”) pension plans know that contribution requirements can be volatile and onerous, especially given current low interest rates. The Ontario Government has taken note. In its recent consultation paper, the Government proposes several approaches to change the current DB funding rules, including the complete elimination of solvency funding. Comments on the Consultation Paper are due by September 30, 2016. The Ontario Government then intends to hold a second public consultation on any proposed funding reforms in the Fall 2016.