An accounting difference involving the Ontario Public Service Employees Union Pension Plan and the Ontario Teachers’ Pension Plan has the government at odds with the province’s auditor.
In its annual report and consolidated financial statements, which were released on Monday, the Ontario government stated the deficit for 2015-16 was $3.5 billion. Under auditor general Bonnie Lysyk’s interpretation, however, it was $5 billion. Treasury Board president Liz Sandals says the province has been following the same pension accounting treatment for the past 14 years.
The government says the Ontario Public Service Employees Union Pension Plan and the Ontario Teachers’ Plan, which are jointly sponsored with the government, have a surplus but the auditor general says that should not be on the province’s balance sheet.
Read: Auditor general calls OPG’s pensions ‘generous’
As a result of the concerns around the accounting practices, Ontario approved a time-limited regulation that legislates the accounting for pension assets of jointly-sponsored pension plans for the 2015-16 public accounts. The change in accounting treatment is not a reflection on the funding status of the plans or the quality of financial reporting by the province, the report said.
The Ontario government says it will be tapping an expert panel to review its pension accounting standards.
Read: Eliminating solvency funding on the table as Ontario reviews DB rules