CANADA - Ontario is to toughen pension funding requirements for companies and will strengthen its guarantee fund as part of a raft of reforms aimed at bolstering its pensions system.
The proposals, to be included in legislation this autumn, are the result of extensive consultations and build on the first phase of reforms that passed through the Legislature in May as a result of the province's Expert Commission on Pensions report.
This second set of reforms would address almost 40 recommendations from the commission and means the government has now responded to two-thirds of the 142 recommendations in the commission's report. Remaining recommendations will be considered for inclusion in future reforms, it said.
Among the latest changes are plans to tighten the rules for valuing pension assets and liabilities, making it more difficult for companies to avoid making contributions when plans become underfunded.
Pension surplus rules will be clarified and provide a dispute resolution process to allow members, retirees and sponsors to reach agreements on how surplus should be shared on wind up.
Companies would also be prevented from taking contribution holidays unless plans were funded to a certain threshold.
In addition, Ontario's Pension Benefits Guarantee Fund will be improved by implementing a strategy to build reserves, increase revenues, limit current exposure and reduce risk to taxpayers in the future. This will be done by increasing member contributions.
The changes come after the provincial government spent hundreds of millions to safeguard the pension plans of firms like Nortel Networks Corp and General Motors.
"The province is committed to modernizing Ontario's pension system to balance the concerns of workers, retirees, and employers, Ontario Finance Minister Dwight Duncan said in a statement.
"Ontario is continuing to call for a modest expansion of the Canada Pension Plan and is in discussions with other governments regarding pension innovations that could lower costs and facilitate access to defined contribution plans.
Ontario regulates approximately 8,350 employment pension plans, which comprise more than 40% of all registered pension plans in Canada.
Kerrin Rosenberg says DB schemes can't afford to suffer lousy returns over the short term and make it all back in 10 to 15 years' time, because many of the assets will be gone.
Standard Life Aberdeen has won a tribunal in which it claimed Lloyds Banking Group was not entitled to give notice to terminate investment management arrangements for a £109bn mandate.
Professional Pensions is looking to update its list of pensions master trusts in the UK ahead of authorisation. Can you help?
RPMI Railpen is in the next step in the journey towards achieving cost disclosure. Victoria Bell tells Stephanie Baxter about taking part in the Cost Transparency Initiative's pilot phase