Bill 236, Pension Benefits Amendment Act, 2010, received royal assent on May 18, 2010. As discussed in previous posts (from April 21, 2010 and December 10, 2009) Bill 236 makes a number of significant changes to the Ontario Pension Benefits Act, including:
- eliminating partial wind-ups;
- introducing immediate vesting;
- extending “Rule of 55” grow-in benefits to all plan members whose employment is involuntarily terminated (other than where there is wilful misconduct, disobedience or wilful neglect);
- enabling plan sponsors to access surplus on the full or partial wind-up of a plan by entering into a surplus sharing agreement;
- taking steps to facilitate asset transfers and plan mergers;
- increasing plan transparency, and plan members’ and retirees’ access to information; and
- permitting plans to offer phased retirement.
Most of these provisions will come into force on a date to be proclaimed, and many others are subject to requirements yet to be prescribed by regulation. Nonetheless, given the breadth of the changes and the fact that they may be proclaimed at any time, plan administrators should begin reviewing their plans and administrative practices and planning for the changes that will be required now. For example, plan administrators will want to ensure that they have processes in place to enable them to respond to potential requests from members and retirees with respect to advisory committees, to provide statements containing plan-related information to former members and retirees, and to transfer lump sum payments of small amounts to registered retirement savings arrangements.