Sept 1, 2017
With details about long-awaited reforms to the funding framework of defined-benefit plans in Ontario expected to be released later this fall, industry experts remain cautiously optimistic about the changes and the impact they will have. In an article in Law Times, Michael McKiernan explores the topic in some detail, seeking input from leading pensions lawyers, including Jana Steele, a partner in Osler’s Pensions & Benefits Group.
The reforms represent a step away from onerous solvency funding requirements in favour of going-concern valuations, Jana explains, adding that “[i]t’s a welcome change for defined-benefit sponsors in the province, because it’s going to make their costs a bit more predictable and plans potentially more affordable.”
Under the proposed changes, pensions that have funding ratios of 85% or more will no longer have to fund themselves on a solvency basis.
While the lack of details makes it difficult to have a definitive opinion on the new framework, industry lawyers – and their clients – are hopeful that the reforms will offer more flexibility for plan sponsors while still protecting beneficiaries.
Learn more in Michael McKiernan’s full article “Pension sponsors hopeful about new funding framework” at the August 28, 2017 online edition of Law Times.