Ontario’s government announced on Wednesday that it is implementing changes designed to strengthen the Pension Benefits Guarantee Fund, which backstops pensions if plans are wound up without sufficient funds to cover promised benefits.

Beginning January 1, 2012, the government will make a variety of changes that, it says, will help to make the fund more sustainable by reducing the size of claims, and ensuring it has sufficient funds to cover them.

The changes, which were first announced in 2010 and reaffirmed in the 2011 budget, include:
• establishing a minimum assessment level for each covered plan;
• raising the base fee per plan member;
• increasing the maximum fee per plan member;
• eliminating the overall assessment cap, currently $4 million, for underfunded plans; and,
• extending the initial waiting period for PBGF coverage of new plans and benefit improvements from three to five years.

PBGF assessments are paid by the company or organization that sponsors the pension plan, not employees.

“Our government continues to strengthen the Pension Benefits Guarantee Fund to protect the pensions of Ontario’s plan members and retirees. We will implement this strategy as we move forward with a plan to modernize Ontario’s pension system,” said Finance minister, Dwight Duncan.