On May 20, 2011, the Ontario government filed two new regulations under the Pension Benefits Act.

O. Reg. 177/11 contains several amendments to the Pension Benefits Act General Regulation 909 ("Regulations”) relating to measures first introduced by the government when it tabled Bill 120, Securing Pension Benefits Now and for the Future Act, 2010, which was previously reported here.

Specifically, the Regulations will be amended to no longer require jointly-sponsored pension plans (“JSPPs”) that were in existence on August 24, 2010 to be funded on a solvency basis. In return, enhanced disclosures regarding the funded status of the plan and the potential implications for members’ benefits must be provided to members of JSPPs that cease funding on a solvency basis.

In addition, all JSPPs, regardless of when established, will be required to file a certification that they meet the criteria of a JSPP set out in the Regulations.

O. Reg. 177/11 further sets out new rules applicable to all Ontario-registered pension plans:

• Effective June 1, 2011, the Regulations will be amended to transition in a new funding threshold for the purpose of triggering an annual actuarial valuation. By December 31, 2012, annual valuations will be required where a pension plan is less than 85% funded on a solvency basis.
• Effective January 1, 2012, annual statements will be required to include additional information regarding a plan’s funded status and the potential implications for members’ benefits.

The government also filed O. Reg. 178/11, the Solvency Funding Relief For Certain Public Sector Pension Plans Regulation. As previously reported, the government is providing solvency funding relief for public sector and broader public sector (“BPS”) pension plans, and had previously released the details of the relief to be provided over two separate stages.

O. Reg. 178 sets out the prescribed rules regarding the solvency funding relief, including the relief provided under both stages and the conditions that apply to a pension plan that is approved for relief (e.g., accelerated funding is required if benefit improvements are made).

O. Reg. 178 also sets out a schedule of those BPS plans that have been accepted for Stage 1 relief. O. Reg. 178/11 came into force on May 20, 2011, the date it was filed.

O. Reg. 177/11 contains a provision related to the solvency funding relief provided under O. Reg. 178, which amends the Regulations to identify a new window for BPS pension plans wishing to apply for relief where their next actuarial valuation is dated between August 1, 2010 and May 30, 2011.

Further amendments to the Regulations supporting the ongoing pension reform are anticipated and we will continue to monitor and report any developments.