Ontario Files Significant Regulations under the Pension Benefits Act
On June 26, 2012, the Ontario government filed a number of amendments to regulations made under the Pension Benefits Act (“PBA”). Specifically, the government filed the much anticipated O. Reg. 178/12 amending General Regulation 909 to support numerous pension reforms.
As reported in prior posts and our FTR Now of May 9, 2012, “Implementation of Key Pension Reforms is Imminent,” these amendments to the General Regulation support, among other changes, the new immediate vesting and locking in provisions of the PBA, as well as the new enhanced grow-in rights and additional prescribed disclosure requirements.
However, it appears that the government has further revised the amendments to the regulations since they were first posted in draft on April 30, 2012. For example, O. Reg. 178/12 now provides only two prescribed exemptions from the definition of “activating event” in relation to enhanced grow-in benefits: (1) where the member is a construction employee, as defined in O. Reg. 285/01 of the Employment Standards Act, 2000 (“ESA”); and (2) where the member is an employee who is on a temporary lay-off, as defined in subsection 56(2) of the ESA. The draft regulations previously included a third exemption in respect of fixed term contracts, which is no longer included in O. Reg 178/12. O. Reg. 178/12 also differs from the draft regulations as it now specifies that where an employer has given notice of termination of employment to an employee and that person decides to resign his or her employment at any time in advance of the termination date, the termination will continue to be an activating event.
O. Reg 178/12 should be consulted for coming into force information.
The government also filed O. Reg. 179/12, Solvency Funding Relief for Certain Public Sector Pension Plans, O. Reg. 180/12, Abibow Canada Inc. Pension Plans, O. Reg. 181/12, General Motors Pension Plans and O. Reg. 182/12, Stelco Inc. Pension Plans, which make corresponding reform-related amendments to those regulations in respect of particular pension plans. These amendments confirm that benefit improvements required by law are not restricted under these individual regulations and update references to “members and former members” by substituting “members, former members and retired members” consistent with the new provisions of the PBA. Of note is that O. Reg. 182/12 also exempts the General Motors pension plans from the application of the enhanced grow-in rights applicable to Ontario pension plans effective July 1, 2012. O. Reg 179/12, O. Reg. 180/12, O. Reg. 181/12 and O. Reg. 182/12 come into effect on July 1, 2012.
An FTR Now containing a more detailed discussion of these regulatory amendments will be available shortly on our website.
We will continue to monitor regulatory developments as Ontario pension reforms are proclaimed into force in the near future, including the remaining reforms contained in Bill 236, discussed in our FTR Now of May 19, 2010, “Implementing Phase One Of Ontario Pension Reform: A Roadmap For Plan Sponsors And Administrators,” as well as 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 defined benefit plans.