This Report provides pension stakeholders with up-to-date funding, investment and actuarial information based on 1,283 defined benefit (DB) pension plans registered in Ontario. It uses data from the latest filed funding valuation report (AR) and Actuarial Information Summary (AIS) with valuation dates between July 1, 2012 and June 30, 2015 and financial statements and Investment Information Summary (IIS) for plan years ending in the period from July 1, 2014 to June 30, 2015. Data for the trends analysis was drawn from ARs with valuation dates between July 1, 2011 and June 30, 2015.
While the overall funded position of pension plans improved slightly compared to what was reported in the 2014 Report, the solvency position of pension plans continues to pose significant challenges. The government has appointed David Marshall, former president and CEO of the Workplace Safety and Insurance Board, to lead a review of the current solvency funding framework. A stakeholder group is being established to ensure that reforms to the existing framework are informed by a broad range of stakeholder opinions. A consultation paper, outlining possible reform measures, will be released in spring 2016.
To provide plan sponsors with more immediate assistance, the government announced that it will extend temporary solvency funding relief measures as provided in 2009 and 2012. Draft regulations will be posted for consultation in spring 2016.
An overview of the solvency relief measures to date, is as follows:
- Specified Ontario Multi-Employer Pension Plans (SOMEPPs)
The government introduced changes to the Regulation with respect to funding rules in 2007, to provide temporary funding relief for SOMEPPs by exempting them from funding on a solvency basis. The relief period was extended twice – to September 1, 2012 and then to September 1, 2017.
- Certain Defined Benefit Pension Plans
In 2009, the Regulation was amended to provide temporary solvency funding relief for other DB plans meeting certain eligibility requirements. The Regulation was amended in November 2012, to continue providing options for temporary solvency relief similar to those introduced in 2009. These measures apply to the first filed valuation report with a valuation date on or after September 30, 2011 and before September 30, 2014.
- 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. The substantive relief measures are outlined in Regulation 178/11, and were extended and expanded by amendments to the Regulation, in 2013 and 2015.
The funding relief is to be provided in two Stages. At the end of Stage 1, if a plan demonstrated that sufficient steps had been taken towards sustainability, it would be eligible to enter Stage 2 of the process. Currently, 25 pension plans are named in Schedule 1 and 18 pension plans are named in Schedule 2.
For more information on this Report, please contact:
Mr. Teck Go
Chief Actuary, Pensions
May 2000 Paper on Risk-Based Supervision of Pension Plan Funding Size: ## kb