Earlier this month, the Ontario government introduced Bill 120, The Securing Pension Benefits Now and for the Future Act, 2010 for first reading. While we commend the government for pushing ahead with pension reform, we are concerned that a number of the amendments may not resolve ongoing issues as intended or may in fact have unintended consequences.
We have begun posting items on our blog expressing some of our thoughts on Bill 120 (for example, see our October 22, 2010 post on the Bill's surplus withdrawal provisions) and we have also made a submission to the Ontario government outlining our concerns in greater detail. Our submission includes the following recommendations:
- clarify that all reasonable plan administration expenses can be paid from the plan fund without regard to historical plan documents as long as the current or amended plan terms permit such payments;
- clarify that any limitation on contribution holidays based on plan documents is limited to current plan documents, as amended;
- specify that when seeking to withdraw surplus in the context of a partial wind-up, the employer is only required to seek the consent of the plan members affected by the partial wind-up, not the plan members as a whole;
- amend the surplus arbitration provisions to include criteria to guide the Superintendent when exercising his discretion to appoint an arbitrator and greater clarity regarding the arbitrator's authority; and
- with respect to plan mergers, eliminate the provision providing that surplus arising under any plan into which assets have been transferred is to be construed as prohibiting the payment of surplus to an employer unless both plans provide for payment of surplus prior to the merger, or at least clarify that only the terms of the predecessor plan as of the date of the merger are relevant.