123RF.com/Diego Grandi

The Ontario government has significantly cut financial penalties for plan sponsors making a late payment of a pension benefits guarantee fund assessment.

The change, made through an amendment to the provincial Pension Benefits Act, will apply to plan sponsors that fail to pay their PBGF assessments that are due between April 30 and Dec. 31.

Read: An overview of Canadian DB pension relief measures during coronavirus

Plan sponsors will only be required to pay interest from the date the amount is due to the actual payment date at a rate of three per cent, plus the chartered banks’ rate on prime business loans on the payment due date. Normally, plan sponsors that fail to pay their PBGF assessments on time must pay 120 per cent of the amount owing, plus interest.

The provision will only apply if plan sponsors pay their assessment plus interest by Dec. 31, 2020.

Copyright © 2020 Transcontinental Media G.P. Originally published on benefitscanada.com

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