This Report reflects FSCO’s continuing progress in delivering its legislative mandate to monitor and assess pension risks by providing pension stakeholders with up-to-date funding, investment and actuarial information on the Ontario registered defined benefit (DB) pension plans it regulates.
FSCO has implemented a more comprehensive and integrated approach to assess pension plan risks through its enhanced Risk-Based Regulation (RBR) framework and by applying consistent principles in its pension regulatory processes and activities.
The Report uses data from the latest filed funding valuation reports (AR) and Actuarial Information Summaries (AIS) with valuation dates between July 1, 2013 and June 30, 2016 and financial statements and Investment Information Summaries (IIS) for plan years ending in the period from July 1, 2015 to June 30, 2016. The trends analysis data was drawn from ARs with valuation dates between July 1, 2012 and June 30, 2016.
Highlights of the Report include:
- the median going concern funded ratio improved for the fourth consecutive year;
- the percentage of underfunded plans on both a going concern and a solvency basis has decreased compared to the 2015 Report;
- there is significant improvement in the projected median solvency ratio year over year based on known and assumed factors; and
- while there was no significant change to the overall allocation between fixed and non-fixed income, the asset mix of pension funds appeared to be slightly more sophisticated with 7% in alternative assets.
Temporary solvency funding relief measures continue to be in place; an overview of the measures is provided below:
- Specified Ontario Multi-Employer Pension Plans (SOMEPPs)
Regulation changes in 2007 exempted SOMEPPs 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
Regulation changes in 2009, 2012 and 2016 provided temporary solvency funding relief for DB plans meeting certain eligibility requirements. The 2016 relief measures apply to the first valuation report filed with a valuation date on or after December 31, 2015, and before December 31, 2018.
- Certain Public Sector Pension Plans
Regulation 178/11 implemented solvency funding relief measures in 2011, for certain pension plans in the public sector and broader public sector. It was amended in 2013, 2015 and 2016, to extend and expand these measures. The funding relief is to be provided in 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