The 2013 Report on the Funding of Defined Benefit Pension Plans in Ontario is FSCO’s tenth annual report providing pension stakeholders with up-to-date funding, investment and actuarial information related to defined benefit (DB) pension plans registered in Ontario.
Since 2000, funding valuation reports of DB pension plans filed with FSCO are accompanied by an Actuarial Information Summary (AIS). Starting in 2006, all DB pension plans registered in Ontario (except for designated plans) are required to file an Investment Information Summary (IIS), in addition to the financial statements required under section 76 of the regulations under the Pension Benefits Act (the Act). The AIS and the IIS allow FSCO to:
- Collect key actuarial, financial and investment information contained in the funding valuation reports and financial statements filed under the Act;
- Use this data to analyze the funded status, contribution levels, actuarial assumptions and investment management practices of DB pension plans;
- Identify pension and investment market trends; and
- Conduct additional analysis in its monitoring of pension plan risks.
The 2013 Report has been prepared based on the latest filed funding valuation reports and AIS’s with valuation dates between July 1, 2010 and June 30, 2013 and financial statements and IIS’s for plan years ending in the period from July 1, 2012 to June 30, 2013. In addition to analyzing the actual information contained in these reports and information summaries, an estimate of the solvency funded ratio as at December 31, 2013 for all plans in aggregate is provided by projecting from their most recent valuation dates. The projection takes into account the actual median returns for Canadian pension plans, the changes in solvency valuation interest rates, and the estimated special payments to be paid into the pension plan to liquidate any funding deficits.
The 2013 Report* Size: ## kb includes information on the funding relief measures implemented in 2007, 2009, and 2012 by the Ontario Government.
Specified Ontario Multi-Employer Pension Plans (SOMEPPs)
The 2007 measures provide temporary funding relief for SOMEPPs by exempting them from funding on a solvency basis – the relief period was extended in 2012 to end on September 1, 2017.
Certain Defined Benefit Pension Plans
The opportunity introduced in June 2009, for certain DB pension plans to elect temporary solvency funding relief measures, has now ended. Three funding relief options were available for only the first filed valuation report with a valuation date on or after September 30, 2008 and before September 30, 2011:
- Deferral of the start of special payments required to liquidate a new going concern unfunded liability or new solvency deficiency for up to twelve months;
- Consolidation of existing solvency special payments into a new five years payment schedule commencing on the valuation date of the solvency relief report; and
- Extension of the period for liquidating a new solvency deficiency from five years to a maximum of ten years (with member consent).
The 2012 measures provide certain DB pension plans with similar options for temporary solvency relief as those introduced in 2009 by the Ontario government. The 2012 temporary solvency funding relief measures apply to the first filed valuation report with a valuation date on or after September 30, 2011 and before September 30, 2014. The relief measures include consolidation of existing solvency special payments into a new five-year payment schedule, and allowing new solvency deficiencies to be amortized over a period of up to 10 years instead of five years, with member consent. In addition, the Regulation has since been amended to generally allow for all plans to defer, for up to one year, the start of special payments required to liquidate new going concern unfunded liability or new solvency deficiency.
Certain Public Sector Pension Plans
In May 2011, the government implemented solvency funding relief measures for certain pension plans in the public sector and broader public sector in two stages. The substantive relief measures are outlined in Regulation 178/11. Eligibility criteria, the application process and additional conditions as well as examples of steps that eligible pension plans could take and the measurement of financial impacts are not part of the regulation, but are outlined in in a technical paper Size: ## kb issued by the Ministry of Finance.
The pension plans that meet the criteria for temporary Stage 1 solvency funding relief are named in Schedule 1 of Ontario Regulation 178/11. Similarly, the pension plans that meet the criteria for temporary Stage 2 solvency funding relief will be named in Schedule 2 of Regulation 178/11.
For more information on this report, please contact:
Mr. Lester Wong
Chief Actuary, Pension Division
*Table 5.5 was revised on April 10, 2014.
Previous Reports on the Funding of Defined Benefit Pension Plans in Ontario
- 2012 Report (2009-2012) Size: ## kb (released August 2013, PDF)
- 2011 Report (2008-2011) Size: ## kb (released March 2012, PDF) Note: Chart 4.2 was revised on May 1, 2012.
- 2010 report (2007-2010) Size: 1008 kb (released March 2011, PDF)
- 2009 report (2006-2009) Size: 2242 kb (released March 2010, PDF)
- 2008 report (2004-2008) Size: 296 kb(released March 2009, PDF)
- 2007 report (2003-2007) Size: 273 kb(released March 2008, PDF)
- 2006 report (2002-2006) Size: 577 kb(released March 2007, PDF)
- 2005 report (2001-2005) Size: 276 kb(released June 2006, PDF)
- 2004 report (2000-2004) Size: 178 kb(released Sept 2005, PDF)
May 2000 Paper on Risk-Based Supervision of Pension Plan Funding Size: ## kb