The 2013 Ontario budget proposes introducing pooled registered pension plans (PRPPs) in the province.

“The Ontario government will now be consulting with interested parties to determine how PRPPs should be implemented as a retirement savings option before introducing legislation,” the budget states.

Just last year, the provincial government, led by then-premier Dalton McGuinty, appeared to be against the idea.

Read more:

“The change in Liberal leadership has changed [the government’s] tune,” says Ian Edelist, a principal with Eckler Ltd. and the pension practice leader in Toronto. “It’s not a big surprise.”

Other provinces have already indicated that they will be introducing PRPPs and Ontario didn’t want to be the lone holdout, he explains, adding that it might be complicated for employers with offices in different provinces to offer PRPPs to some employees but not all.

Read more:

Ontario will also be moving ahead on regulatory changes to target benefits in multi-employer pension plans. Assuming outstanding federal tax issues will be resolved in consultation with interested parties, the government will develop a framework for single-employer target benefit plans, including funding rules, plan governance, the timing of necessary benefit reductions, permitted benefit improvements, and notice to members and retired members.

As well, the province will move ahead with a pooled asset management framework to allow smaller public sector plans to benefit from lower investment management costs. It intends to establish a technical working group to advise on the design, governance and transition issues. The working group will then report back to the minister of finance later this year with a detailed implementation plan.

The province also mentioned a number of reforms in the budget, such as its intention to do the following:

  • review the Ontario Court of Appeal’s recent ruling regarding spousal entitlements in the case of Carrigan v. Carrigan Estate, propose amendments to the Pension Benefits Act (PBA) and, if necessary, amend the regulations under the PBA;
  • amend the regulations under the PBA and, if necessary, propose amendments to the PBA that would permit assets to be transferred from employer‐sponsored single‐employer pension plans to jointly sponsored pension plans (JSPPs) and allow employer‐sponsored single‐employer pension plans to be converted to JSPPs, if specified conditions are met;
  • implement a new “funding concerns” test that would determine when plans that are not obliged to satisfy solvency funding requirements are required to file annual valuations;
  • implement a framework for contribution holidays that specifies eligibility conditions and ensures that affected pension parties are appropriately informed;
  • update regulatory requirements to reflect appropriate changes to standards issued by professional bodies; and
  • prescribe rules for plan documents and statements for former and retired members.

However, these proposals are just that unless the New Democratic Party supports the budget. The governing Liberals currently hold a minority of seats in the legislature.

Read more:

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

Join us on Twitter

Add a comment

Have your say on this topic! Comments that are thought to be disrespectful or offensive may be removed by our Benefits Canada admins. Thanks!

* These fields are required.
Field required
Field required
Field required