In its 2019 budget announcement on Thursday, the Ontario government said it’s taking a step towards implementing a framework for target-benefit pension plans.
The budget included preliminary legislative changes that would expand the eligibility criteria for multi-employer target-benefit plans to include non-unionized multi-employer plans, in addition to those that are collectively bargained. The move is intended to allow more organizations to provide “defined benefit-like pensions.”
“The government will continue to work with stakeholders as it develops further elements of the target-benefit framework, including the funding framework,” the budget read.
Referring to the province’s accounting treatment of public pension assets, the budget proposed the implementation of certain recommendations by the Independent Financial Commission of Inquiry, which was established by the government in July 2018 to examine the province’s accounting practices.
The budget noted the government is actively engaging the auditor general to try to agree on the accounting treatment of any net assets of the Ontario Teachers’ Pension Plan and the Ontario Public Service Employees’ Union pension plan. In April 2018, Auditor General Bonnie Lysyk released a report suggesting the former Liberal government wrongfully recorded revenue from the Ontario Teachers’ and insufficient pension expense from the OPESU plan.
Also at the recommendation of the commission, the government noted it will review the methodology used to establish fair-market value for those plans’ assets, as well as the management assumptions used to determine their long-term liabilities.
In addition, the budget recommended that pensions in Ontario should go paperless. It noted the inefficiency and costliness of continuing to use paper-based options for member communications. Without actually proposing specific legislation, it said the government is considering making changes to the Pension Benefits Act that would make electronic communication the default option, but members could still opt into paper methods if they wanted.
Dealing further with financial security in retirement, the budget also introduced a dental benefit for low-income seniors. It said that by late summer 2019, those 65 and older, with an income of $19,300 or less, or $32,300 or less for couples, who don’t have dental benefits, will be able to be treated in public health units, community health centres and Aboriginal health access centres.
Also in health care, the budget noted the government is considering changes to the way pharmacies are paid by the Ontario Drug Benefit program, inducing fees paid for filling prescriptions for long-term care home residents.