Ontario Files BPS Solvency Funding Relief, JSPP Funding Rules and Filing of Actuarial Valuations Regulation
On June 22, 2012, the Ontario government filed O. Reg 164/12 made under the Pension Benefits Act, amending Regulation 909 (General).
Generally speaking, plan administrators are required to file actuarial valuations within nine months from the date of the valuation. O. Reg 164/12 provides an extension to the window for filing actuarial valuations in accordance with Regulation 909. It amends Regulation 909 to provide an extended period for filing actuarial valuations for defined benefit (“DB”) plans and states that administrators may file the first report for which the valuation date is on or after September 30, 2011 and before March 31, 2012 by December 31, 2012. The Ontario government has indicated that this is the first step towards implementing additional temporary solvency funding relief for Ontario pension plans.
O. Reg 164/12 further amends Regulation 909 to support the funding relief previously introduced for public sector and broader public sector (“BPS”) pension plans. While exempting public sector pension plans listed in Schedule 1 to O. Reg. 178/11 (Solvency Funding Relief for Certain Public Sector Pension Plans) as amended, for which Phase I relief has already been granted, O. Reg 164/12 extends the filing deadline for actuarial reports dated between September 30, 2011 and May 31, 2012 to February 28, 2013. O. Reg 164/12 correspondingly extends the deadline for BPS employers to pay amounts due under the actuarial valuation to March 1, 2013.
Finally, O. Reg 164/12 temporarily changes the conditions applicable to a jointly-sponsored pension plan (“JSPP”) if the “benefit allocation method” is not used for purposes of determining the amount of contributions to be made to the JSPP. JSPP will be exempt from the requirements of s. 4(2.3) of Regulation 909 in respect of valuation reports dated between January 1, 2102 and April 1, 2018. This exemption effectively relieves JSPPs from performing comparative or references tests when preparing valuation reports for purposes of determining the required contributions to the JSPP.
O. Reg. 164/12 came into force on the day it was filed.
We will continue to monitor regulatory developments as Ontario pension reforms are proclaimed into force in the near future, including the funding reforms first announced in conjunction with Bill 120, discussed in our FTR Now of October 29, 2010, “Ontario Introduces Bill 120, the Securing Pension Benefits Now and for the Future Act, 2010,” and the more recent announcement by the Ontario government in the 2012 Budget committing to extend temporary solvency relief for most Ontario DB plans.