Ontarios provincial government plans to introduce legislation in 2009 to provide temporary pension plan funding relief by spreading corporate funding payments over 10 years, from the current requirement of five years, according to a news release from Ontario Finance Minister Dwight Duncan.
The proposal would make the funding requirements retroactive to Sept. 30 and would, among other things, consolidate previous funding schedules; defer catch-up payments for one year; allow the use of actuarial gains to reduce annual cash payments; and temporarily limiting contribution holidays.
By proposing these changes on pensions, we are protecting Ontario jobs and bringing an element of stability in a time of great economic uncertainty, Mr. Duncan said in a written statement. We are proposing action to strengthen and protect the viability of Ontarios 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.
Ontario regulates 4,100 defined benefit plans, more than a third of Canadas 11,000 plans.
In late November, Canadian Finance Minister Jim Flaherty also proposed extending the solvency payment time period for pension plans under federal jurisdiction to 10 years from five.