Insights Header image
Insights Header image
Insights Header image

The 2017 Ontario Budget – Pensions and Benefits Play a Central Role

May 2017 Pensions and Benefits Law Bulletin 3 minute read

On April 27, 2017, the Government of Ontario put forward its 2017 Budget and introduced legislation – Bill 127, An Act to implement Budget measures and to enact and repeal various statutes – to implement the measures contained in the Budget.

Among the many features of the 2017 Ontario Budget were a number of provisions relating to pensions and benefits, a number of which appear to continue the push to expand the pension options available to Ontario workers and enable greater certainty for both pensioners / retirees and employers. The 2017 Budget measures include:

Changes to Defined Contribution Plans

Ontario intends to develop regulations before the summer legislative break to facilitate the implementation of variable benefits, which are periodic payments made upon termination or retirement from a specified variable benefit account.

The province has also stated that it will examine decumulation (the process of converting pension savings into retirement income) and engage with stakeholders on potential changes to defined contribution plan annual statements, with a view to increasing transparency and plan member understanding.

Establishing the Financial Services Regulatory Authority (FSRA) Changes to the Financial Services Tribunal (FST)

Ontario announced that it expects to appoint the FSRA’s board of directors in Spring 2017. The province also plans to introduce legislation to formally establish the FSRA’s mandate and governance structure by the end of 2017. In the meantime, the province has introduced amendments through Bill 127 to permit the FST to manage its caseload by combining procedure or hearings.

Missing Beneficiaries

In an effort to ease the burden on employers / pension administrators in dealing with missing beneficiaries, Ontario will instruct the Superintendent of Financial Services (Superintendent) to establish a policy providing direction to administrators on how to locate beneficiaries. The Superintendent will also have authority to waive periodic statement requirements where an administrator can demonstrate that a beneficiaries is, in fact, missing. There was, however, no mention in the Budget of plans to create a fund into which the monies of missing beneficiaries could be transferred.

Solvency Funding

Following up on 2016 consultations in response to pressure on plan solvency, caused mainly by years of very low interest rates, Ontario plans to announce guiding principles of a new solvency funding framework later this spring. The province’s goal is to release draft regulations for public comment in Fall 2017. We will keep you abreast of the draft regulations as they become available.

Pooled Registered Pension Plans (PRPPs)

Ontario used the Budget to announce recent legislation to permit Ontario employers to offer PRPPs and to make Ontario part of the Multilateral Agreement Respecting PRPPs.

Target Benefit Plans

Ontario will announce a proposed framework for target benefit multi-employer pension plans (MEPPs) this Spring and plans to release draft regulations for public comment in the Fall. The MEPP framework is meant to replace regulations for specified Ontario MEPPs (SOMEPPs), whose members are unionized. Ontario is also exploring options for a target benefit MEPP framework for plans that do not presently meet SOMEPP criteria.

Expanding the Superintendent’s Powers

Following up on amendments to the Pension Benefits Act proposed in 2016, Ontario plans, in Spring 2017, to post regulations that would allow the Superintendent to issue administrative monetary penalties (AMPs). Bill 127 includes further amendments that will boost the Superintendents authority, including providing authority to direct administrators to provide beneficiaries with specified information and to require administrators hold a meeting to discuss matters specified by the Superintendent (though the parameters of such meetings remain unclear).

Prescription Drug Coverage

Finally, the most prominent feature of the 2017 Ontario Budget was the plan to provide drug coverage for all individuals under the age of 24 in Ontario. In doing so, the province will cover the cost of mediations funded through the Ontario Drug Benefit Program.

Benefits providers may be notably impacted by the changes, including in the area of benefits for immediate family members, and should closely monitor the roll-out of the drug coverage changes.

by Kyle Lambert

A Cautionary Note

The foregoing provides only an overview and does not constitute legal advice. Readers are cautioned against making any decisions based on this material alone. Rather, specific legal advice should be obtained.

© McMillan LLP 2017

Insights (5 Posts)View More

Featured Insight

Warning For Businesses: Companies Can be Liable for Tort of Bribery Even if They Did Not Intend to Pay or Receive a Bribe

Businesses with a duty to provide impartial advice must take steps to ensure the payments they make or receive are not later interpreted as bribes.

Read More
Apr 12, 2024
Featured Insight

Storm Clouds Looming: The Impact of Competition Act Changes on Leasing

The Affordable Housing and Groceries Act (Bill C-56) recently introduced changes to the Competition Act (Canada) which will govern all landlord and tenant leases and other agreements, not just those of grocery stores

Details
Tuesday, April 30, 2024
Featured Insight

Sidestepping Contracts: The Expansion of Environmental Liability Where The Contractor Is Not Paid

B.C. Court’s decision in Cordy Environmental Inc v Obsidian Energy Ltd opens the door for contractors to sue former owners/operators of contaminated sites.

Read More
Apr 12, 2024
Featured Insight

Amendments to Ontario’s Conservation Authorities Act: Effective April 1, 2024

On April 1, 2024, significant amendments to the Conservation Authorities Act came into effect.

Read More
Apr 10, 2024
Featured Insight

Foreign Investment in the EV Battery Market: Regulatory Framework in North America and Canada’s Strategic Edge

Explore Canada & U.S. electric vehicle battery market growth, incentives, and foreign investment regulations. Strategic insights for Indo-Pacific companies.

Read More
Apr 10, 2024