The Financial Services Commission of Ontario (FSCO) has announced changes to the new Pension Benefits Act grow-in rules, providing an opt-out provision for jointly sponsored pension plans (JSPPs) and multi-employer pension plans (MEPPs).
The Pension Benefits Act is to be amended as follows, effective July 1, 2012:
- Section 74 is amended such that, subject to certain exceptions, grow-in benefits must be provided to every member whose employment is terminated on or after July 1, 2012.
- Section 74.1 is added and permits employers (or those who make contributions on behalf of the employers) and the members of JSPPs and administrators of MEPPs to opt out of providing grow-in benefits to their members.
Draft regulations that propose changes to the General Regulation 909 set out the details of the opt-out process. The regulations propose that existing JSPPs and MEPPs will have until July 1, 2013, to opt out of the grow-in benefit provisions.
JSPPs and MEPPs that intend to opt out of the grow-in provisions may file notice with the Superintendent of Financial Services before July 1, 2012. However, the effective date of the election cannot be earlier than July 1, 2012.
As well, JSPPs and MEPPs that are registered in other jurisdictions and have Ontario members may elect to opt out of providing grow-in benefits to their Ontario members. Plan administrators may file notice with the plan’s province of registration before July 1, 2012, with a copy to FSCO. However, the effective date of the election cannot be earlier than July 1, 2012.
For more information on notice requirements and the opt-out provision, visit the FSCO website.