The Ontario government is proposing to introduce legislation this spring to provide pension plans with solvency funding relief.

The proposed legislation would allow businesses to spread their solvency payments over a longer period of time, freeing resources for operations, including payroll expenses, the government said Tuesday.

The legislation would also increase transparency, ensuring that workers and retirees have clear information about the financial health of their plans, while protecting benefit security in a number of ways.

If approved by the legislature, the government’s measures would provide temporary solvency funding relief, through regulations, retroactive to Sept. 30, 2008.

“By proposing these changes on pensions, we are protecting Ontario jobs and bringing an element of stability in a time of great economic uncertainty,” said Finance Minister Dwight Duncan.

If passed, the eight measures would include:

> an extension of solvency amortization periods from five to 10 years with the consent of active and retired plan members;

> consolidation of previous funding schedules;

> deferral of catch-up payments to provide one year of cash flow relief;

> permitting the use of actuarial gains to reduce annual cash payments by plan sponsors;

> enhanced notice to active and retired plan members;

> accelerated funding of benefit improvements;

> temporary limitations going-forward on certain contribution holidays; and

> adoption of the revised Canadian Institute of Actuaries’ Standard of Practice for Pension Commuted Values for solvency valuations.

“We are proposing action to strengthen and protect the viability of Ontario’s pension system to address this situation and help ensure that the plans can fulfill their requirements and meet the needs of their current members and their retirees,” Duncan sadi.

“I am pleased that Minister Duncan is responding to the current funding difficulties encountered by Ontario pension plans in the balanced and transparent spirit of my recent report, A Fine Balance,” said Harry Arthurs, chairman of the Ontario Expert Commission on Pensions.

Duncan also announced members of an economic advisory panel from key sectors who have been actively involved in ongoing discussions regarding the rapidly changing economy.

The panel will continue to offer ideas, analysis and advice in a new forum on ways to strengthen Ontario’s economy.

The members are: Gordon Cheesbrough; Janet Ecker; Tim Hodgson; David Leith; Tito Martins; Michael J. Mueller; Lynn Patterson; Jim Stanford; and Douglas Turnbull.

IE