Jan 8, 2017
Osler associate Jonathan Marin tells Pensions & Investments that employers need to “evaluate their plan designs” in the wake of Ontario legislation easing funding rules for pension plans. In his article, author Rick Baert examines how the Ontario Legislature approved the law that will eliminate the requirement that “defined benefit plans base their funding on the basis of both solvency or immediate termination basis, and going concern or ongoing operations.” The article discusses how these new rules could create more opportunities for plans to diversity their investments – including infrastructure and real estate – and take on more risk. Jonathan, an associate in Osler’s Pensions & Benefits Group, explains the implications for Canadian employers.
"The legislation for this was in late 2016, and given how far off the start was from then, a lot of employers have left the legwork on how to do this until this year," Jonathan tells Pensions & Investments. "It kind of was pushed down the road, but this begins next year, so employers will need to get up to speed on it this year."
He also says that Canadian employers “first will need to evaluate their plan design in relation to what CPP enhancement will provide their workers. They'll also need to consider whether their plan design needs to be changed to take CPP enhancement costs into account.
“They'll also need to update member education on CPP and employer plan integration and update their payroll and administrative processes. This will take a lot of work and, even though the 2019 date begins the phase-in, many of these will need to be done before it starts."
If you subscribe to Pensions & Investments, read Rick Baert’s full article “More infrastructure, real estate investment to come with new rules” in Pensions & Benefits.