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Proposed legislation deals with less controversial issues before more difficult matters to be dealt in further legislative changes planned for 2010.
Toronto (11 December 2009) – Ontario Finance Minister Dwight Duncan yesterday tabled the Pension Benefits Amendment Act, the first of two pieces of legislation to modernize the province's pension laws. He left the more important proposals from last year's report of the Expert Commission on Pensions – like improving pension benefit guarantees, funding and reporting rules and the environment for creating new and innovative pension plans – until next spring.
"We want to get these (changes) out of the way before we deal with the more contentious ones," Duncan told reporters after introducing the pension reform amendments.
Among the changes proposed are:
- Automatic vesting of pension rights for workers joining defined benefit pension plans which means they will immediately be entitled to both their own and employer contributions plus interest, instead of having to wait two years to qualify to have pension rights "vested";
- Giving multi-employer pension plans the right to eliminate enhanced benefits for those laid-off after their age plus service totals 55 years;
- Pension plans will be able to be amended so that older members can shift to part-time and continue to accrue more pension rights while drawing a pension, as permitted in Quebec;
- Providing greater and timelier access to information to members and retirees more ready about the funding status of their pension plan, notice of plan changes;
- Making pension advisory committees easier to establish, allowing members and retired members to monitor plans on an advisory basis;
- Allowing the Superintendent of Financial Services Commission of Ontario (FSCO) – Ontario’s pension regulator – to make interim orders in certain circumstances, such as to require special valuations when there is reason to believe a pension plan is ‘at risk’; and,
- Giving FSCO the power to approve arrangements for altering pension benefits or dealing with benefits when a company seeks protection from creditors or declares bankruptcy, as in the case of Nortel Networks Corp. and AbitibiBowater Inc.
The Pension Benefits Amendment Act, 2009 is part of what the Ontario government calls “a multi-step process that represents the first pension reform of this magnitude in more than 20 years.” Another bill is planned for 2010.
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