Definition of spouse
On Jan. 1, 2017, the All Families are Equal Act came into force. The Act amends the definition of spouse under the Ontario Pension Benefits Act to reference the rules of parentage under the Children’s Law Reform Act.
Powers of the Superintendent
Bill 127, Stronger, Healthier Ontario Act (Budget Measures), 2017, which received Royal Assent on May 17, 2017, gives the Superintendent the authority to order an administrator of a pension plan to hold a meeting to discuss matters specified in the order, to provide members or other entitled persons with specified information, and to waive the requirement to provide a statement to a former member if there are reasonable grounds to believe the member is missing.
On July 1, 2017, provisions relating to the Superintendent’s orders as well as notices of, and appeals from, proposed decisions and orders of the Superintendent came into force. In addition, O. Reg. 213/17 was filed, which gives the Superintendent the power to require an administrator or employer to prepare and file a new valuation report if the Superintendent has reasonable and probable grounds to believe that there is a substantial risk to the security of the pension benefits or there has been a significant change in the circumstances of the pension plan.
Proposed changes to solvency funding
Proposed changes to the statutory regime regarding solvency funding of defined benefit pension plans was introduced on May 19, 2017. The primary proposals include a requirement to fund on a solvency basis only when a plan’s funded status falls below 85 per cent, decrease the amortization period for funding going concern deficits from 15 years to 10, fund a reserve account and increase the minimum guaranteed monthly benefit under the Pension Benefits Guarantee fund from $1,000 to $1,500. Proposed legislative amendments were released in November 2017, but the draft regulations have yet to be released.
On June 29, 2017, the Ontario government provided a new round of solvency funding relief measures by permitting administrators to elect a two-year deferral of funding for any new solvency deficiency arising out of the first solvency valuation on or after Dec. 31, 2016 and before Dec. 31, 2017. However, administrators who elect this deferral are not permitted to extend their solvency funding amortization to 10 years in the same actuarial valuation. Written notice of the election is required to be provided to members, former members and retired members within 60 days of the required filing date of the report.
In addition, while the Ontario government works on establishing a target benefit framework for specified Ontario multi-employer pension plans, the temporary solvency funding exemption for such plans was extended to August 2018.
Amendments facilitating mergers of SEPPS and existing JSSPS
On July 28, 2017, O. Reg. 286/17 was filed and came into force. This regulation amends O. Reg. 311/15 by requiring that when a single-employer pension plan has insufficient assets to satisfy the amount of assets required to be transferred, the sponsor of the plan must pay the resulting deficiency.
Financial Services Regulatory Authority
On June 30, 2017, legislation establishing the new Financial Services Regulatory Authority was declared partially in force, and the initial board of directors was appointed.
Tom Stevenson is a senior associate with Torys. He wishes to acknowledge the assistance of articling student Christina Coliviras.