Proposed changes for Ontario Pension Plans – Bill 236
The Pension Benefits Amendment Act, 2009(Bill 236) which received first reading in the Legislative Assembly of Ontario on December 9, 2009 proposes a number of changes that will affect both plan sponsors and plan members of pension plans. The proposed changes include:
•Immediate vesting upon joining plan
•Elimination of partial plan windups
•Increase in small benefit unlocking amount
•Advance notice of plan amendments required, to all plan members, former members, retired members and trade unions before amendments are registered
•Provision of ‘other’ statements in addition to annual statement to members
•Expansion of required disclosure to include retired members and spouses
•Option to transfer information electronically, with individual’s consent
•Requirement of administrator to assist plan members establishing advisory committees
•Elimination of certain administrator plan registration documents
•Establishment of requirements for reciprocal transfer agreements
Some of the proposed changes could have a significant financial and operational impact on Plan Sponsors, especially immediate vesting and added communication requirements to non-active members.
The current reading of Bill 236 does not differentiate between defined benefit and defined contribution pension plans, therefore, we assume both plan types will be affected.
Premier McGuinty has announced that he will prorogue the Ontario legislature commencing March 4, 2010 with the legislature resuming on March 8, 2010. According to the Premier “we will preserver every one of our bills. Nothing will be lost.”
Proteus is reviewing the proposed changes and will provide further comment as the Bill progresses through the legislative process.
Here is a link to additional information on Ontario’s Proposed Pension Reforms.