The Government of Ontario has proposed an amendment to the Regulation to the Pension Benefits Act (Ontario) (the PBA Regulation) that would modify the quantitative investment limit contained in Schedule III to the Pension Benefits Standards Regulations, 1985 (Canada) (Schedule III) that is incorporated into Ontario pension legislation.
Subsection 9(1) of Schedule III prohibits the administrator of a pension plan from directly or indirectly investing or lending more than 10% of the book value of the assets of the pension fund in or to any one person, two or more associated persons, or two or more affiliated corporations. The modification would remove this restriction for securities issued and fully guaranteed by the Government of the United States of America. The modification will apply to pension plans registered in the Province of Ontario only.
Subsection 9(3) of Schedule III currently provides for an exception for securities issued or fully guaranteed by the Government of Canada, the government of a province, or an agency thereof. The modification would provide a similar, though narrower, exception for U.S. Government securities.
The Ontario Ministry of Finance is soliciting comments on the draft modification until February 18, 2014.