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Member, Beacon International Group, Ltd.
TORONTO--The Ontario government has established a commission to conduct a comprehensive review of the province's pension laws.
The panel will focus on issues such as pension plan funding and surplus, the province's pension benefits guaranty fund, full and partial plan wind ups, plan splits and mergers, asset transfers between pension plans and funding of defined benefit multiemployer pension plans.
The commission is expected to report back to the government in the summer of 2008.
"Ontarians are entitled to pension legislation that is fair and up to date," the province's finance minister, Greg Sorbara, said in a statement. "This review will ensure that plan members and pensioners know that their contributions are protected by a modern set of rules and that Ontario remains a competitive place to do business."
Ontario's Pension Benefits Act has not been substantially updated since 1986. Much has changed in the pension landscape since then, including a Supreme Court of Canada decision mandating distribution of surplus upon partial plan terminations in Ontario and the growing deficit of the guaranty fund, which stood at $237.4 million Canadian ($196.3 million) as of March 31, 2005. Ontario is the only Canadian jurisdiction with a guaranty fund.
There are more than 7,500 pension plans registered in Ontario and more than 2 million plan members. Fifty-one percent of the plans are defined benefit plans, covering 83% of the members, according to January 2005 report by Statistics Canada.
The government also announced that it is extending the current pension surplus-sharing regulation until Dec. 31, 2009. The regulation allows plan members, former plan members and others entitled to payment to share in the surplus of a plan that is being partially or fully wound up.