In its 2022 budget on Thursday, the Ontario government said it’s implementing a permanent target-benefit pension plan framework in 2023.
The budget noted specified Ontario multi-employer pension plans, which provide these types of benefits, have been operating under temporary regulations that will expire in 2024 unless replaced by a permanent framework.
“A permanent target-benefit framework would bring certainty to the sector and pave the way for improved pension coverage as Ontario workplaces will be able to provide employees with lifetime pensions at a more predictable cost for employers.”
Domenic Barbiero, a principal and consulting actuary at Eckler Ltd., says the framework is long overdue, noting the current temporary solvency funding exemption for Ontario-based SMEPPs was introduced in 2007 and has been subject to repeated extensions. During this time, he notes, these plans have successfully navigated numerous challenges without regulatory restrictions and funding requirements.
“These plans have proven to the government that solvency funding does not make sense for target-benefit MEPPs and the current funding framework and temporary solvency exemption should be made permanent for target-benefit MEPPs in Ontario.”
Barbiero also stresses the importance of stakeholder consultations in establishing a permanent framework. “These stakeholders understand the nuances of these plans and that understanding will be invaluable in developing a permanent framework to support the ongoing sustainability of these plans and equity among the various generations of members.”
The budget also proposed an additional $204 million in mental-health supports to expand existing services, implement new solutions and improve access to mental-health and addiction services.
However, while the province said last December it was eyeing a new system to provide portable benefits for workers in the gig economy, retail and hospitality sectors who don’t currently have health, dental or vision coverage, there was no mention of this program in the budget.
This will be the last budget before Ontarians head to the polls on June 2. The provincial New Democratic Party released its election platform earlier this week, promising programs such as dental care and pharmacare. The provincial Liberals released its platform in March, which included promises such as portable benefits and savings programs, as well as 10 paid sick days for all workers.