Ontario employers get pension relief
TheStar.com – Business – Ontario employers get pension relief
December 16, 2008. THE CANADIAN PRESS
Ontario is following a federal government move designed to give pension plan sponsors some relief by extending payment plan deadlines.
Last month, Ottawa doubled the length of time, to 10 years, that federally regulated pension plans have to pay into their coffers to avoid funding shortfalls.
Finance Minister Dwight Duncan says provincially regulated pensions in Ontario will also get an extra five years to meet their funding obligations.
Rules require companies to pay into their pensions the full amount that would be needed to immediately pay out the entire account.
Ontario regulates 4,100 of the 11,000 defined benefit pension plans in Canada, but Duncan’s office doesn’t know how many of those are currently underfunded.
The Office of the Superintendent of Financial Institutions said over two-thirds of federally regulated pension plans were underfunded as of last June.
Since then, stock markets have posted huge losses, which means pension plan deficits have likely grown.
Ontario will also defer catch-up payments to give companies one year of cash flow relief, and is taking several other steps such as permitting the use of actuarial gains to reduce annual cash payments by plan sponsors.