2018 Budget Bill Passed
Bill 31, the Plan for Care and Opportunity Act (Budget Measures), 2018 received Royal Assent on May 8, 2018. There are several amendments to legislation relating to pensions:
- Pension Benefits Act (PBA) to:
- Increase, retroactive to May 19, 2017, the guaranteed benefit under the Pension Benefits Guarantee Fund (PBGF) from $1,000 per month to $1,500 and eliminate the age and service eligibility requirements for members in winding up
- effective May 8, 2018:
- repeal previous amendments to the PBGF provisions that were not proclaimed
- require the government to conduct periodic reviews of the PBGF provisions of the PBA and regulations
- effective on proclamation:
- require mandatory disclosure of certain corporate or plan events (examples identified in the 2018 Ontario Budget documents include asset stripping and the issuance of extraordinary dividends)
- make amendments needed for when the Financial Services Regulatory Authority (FSRA) becomes the pension regulator
- Pooled Registered Pension Plans Act, 2015 to:
- effective May 8, 2018, coordinate better with the federal PRPP statute
- effective on proclamation, make amendments needed for when the Financial Services Regulatory Authority (FSRA) becomes the PRPP regulator
- Financial Services Regulatory Authority of Ontario Act, 2016 to, effective on proclamation, address administrative, governance and other matters that will ensure FRSA becomes operational
Additional PBA Funding Reform Amendments Effective May 1, 2018
On May 1, 2018, regulations and certain PBA amendments took effect to implement Ontario’s new funding framework for defined benefit pension plans. Subsequently, amendments to additional PBA provisions were proclaimed into force, also effective May 1, 2018, including sections:
- 1 – Definitions (new definitions for “provision for adverse deviations” and “reduced solvency deficiency”)
- 10 – Contents of pension plan (MEPP)
- 14.0.1 – Improvement in benefits
- 55 – Funding
- 55.1 – Contribution holidays
- 55.2 – Letters of credit
- 69 – Winding up order by Superintendent
- 79 – Payment of Surplus
- 80.4 – Transfers to a JSPP (conversion of a SEPP)
- 81.0.1 – Conversion of a SEPP by amendment (to a JSPP)
These PBA amendments were set out in Bill 120 (Securing Pension Benefits Now and for the Future Act, 2010) and Bill 177 (the 2017 Budget Bill). In addition, some of the new provisions under Bill 120 were modified by Bill 177.