Ontario Government Announces Phase 2 of Pension Reform
The Ontario government has released a backgrounder outlining proposed measures for Phase 2 of its pension reform agenda. The proposed reforms would add another layer of restrictive rules on private sector defined benefit pension plans and introduce favourable rules for pension plans in the broader public sector.
Continue Reading...Ruling Redefines Actuarially Unreduced Pension Benefits
In C.A.W. v. Kitchener Frame Ltd., the Ontario Divisional Court confirmed an arbitrator's decision to depart from established jurisprudence on actuarially unreduced pension benefits when considering whether employees who retired on pension following a plant closure were entitled to severance pay under the Employment Standards Act, 2000 ("ESA").
Continue Reading...Ontario Pension Reform Legislation Receives Royal Assent
Bill 236, the Pension Benefits Amendment Act, 2009 received Royal Assent late last month. While the new requirements in the Bill will not come into effect until proclaimed, the changes are significant and employers, plan sponsors and administrators should start planning for implementation now.
The Bill introduces the immediate vesting of benefits, rather than requiring of two years of participation in a pension plan. It also allows employers to extend the eligibility period to the maximum of two years or exclude participation in the plan to certain defined classes of employees. New provisions in the Bill will also help facilitate the often complicated task of obtaining regulatory approval for pension transfers in the purchase and sale of businesses where seller and buyers have pension plans. The Bill will also allow for the introduction of phased retirement and electronic transmittal of Plan member consents, notices, statements and other communications.
For more information on Bill 236, please see Heenan Blaikie's Pension Pulse " Ontario Pension Reform Bill 236 Given Royal Assent: Time to Act for Plan Sponsors and Administrators" (pdf).
New UK Coalition Government - Prospects for Employment Law
The outcome of the UK's general election on May 6 was a Conservative/Liberal Democrat coalition government headed by the Conservative Party leader David Cameron (prime minister) and Liberal Democrat leader Nick Clegg (deputy prime minister).
Coalitions are unusual in the UK - the last one being during the Second World War - so there is a real sense of the country entering uncharted political waters. It is too soon to be certain what the new administration's priorities will be in terms of potential employment reforms. However, a few clues can be gleaned from the Coalition's programme for government, outlined below.
Continue Reading...Federal Government Releases Draft Amendments to Pension Solvency and Investment Limits
The federal Department of Finance has released draft amendments to the regulations under the Pension Benefits Standards Act, 1985 (the "PBSA") that would change solvency funding requirements and quantitative investment limits.
Continue Reading...Federal Government Continues Pension Reform Consultation
The federal government has announced that it will continue consultations on pension reform through a series of town hall meetings across
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What are the main issues and challenges that Canadians face in saving for retirement?
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What is the appropriate role of governments in supporting Canadians to achieve adequate retirement income?
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Does the retirement income system currently have the appropriate mix of public and private support?
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Are changes needed to further strengthen
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Should there be more mandatory retirement savings?
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Should individuals be auto-enrolled in any new voluntary savings program?
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Should increased savings, whether mandatory or voluntary, be locked-in for retirement purposes only?
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Should there be more flexibility and choice with respect to private savings options?
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How would the approaches described impact you personally and/or your business?
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How should any changes to the retirement income system be financed?
Interested parties may also participate in the consultation process online or by sending written submissions by e-mail to ris-consultations-srr@fin.gc.ca.
For more information on pension reform in
Age-Based Early Retirement Upheld
In its recent decision in Kovacs v. Arcelor Mittal Montreal, the Human Rights Tribunal of Ontario (the "Tribunal") upheld the validity of an age-based early retirement program.
In this case, the employer, Arcelor Mittal Montreal, offered an early retirement program that provided enhanced pension benefits to employees who had 30 or more years of service, were at least age 55 with 15 or more years of service, or were at least age 52 with 25 or more years of service. A 44 year-old employee with 27 years of service alleged that he was discriminated against on the basis of age contrary to the Ontario Human Rights Code (the "Code") because the sole reason that he did not qualify for the early retirement program was that he was too young.
Continue Reading...Provincial Finance Ministers Release Report on Pension System
The steering committee of provincial finance ministers has released its report (pdf) on the adequacy of retirement income and its proposals for improving pension plan coverage in Canada.
Continue Reading...Ontario Court of Appeal Releases Decision on Peril of Partial Pension Wind-ups
On January 11, 2010, the Ontario Court of Appeal released its decision in Hydro One Inc. v. Ontario (Financial Services Commission). The central issue in the case was whether the number of employees terminated as part of a restructuring could be considered "significant" under the Ontario Pension Benefits Act thereby constituting grounds for a partial wind-up order.
Continue Reading...Pension Plan Sponsors Pessimistic About Canadian Pension System
According to a recent survey of Defined Benefit pension plan sponsors, 89% of plan sponsors believe that Canada's pension system is either poorly positioned or average in its ability to meet the future needs of Canadians. Nearly half of respondents identified investment risk as their primary concern. The risk of pension shortfalls was second with nearly 36% of respondents identifying this as their primary concern. Despite the generally negative results, 72% of respondents felt that Canada's pension system is either the same or better than other pension systems around the world. Only 8% of respondents believe Canada's pension system is worse.