The Ontario government confirmed its commitment to ongoing pension reform in the 2011 Ontario budget announced on March 29, 2011.1 Several new proposals contained in the budget build on the pension reforms passed in 2010.
The key proposals include
- equiring pension plans to file Statements of Investment Policies and Procedures (SIP&Ps) with the regulator and disclose whether or not their SIP&Ps consider environmental, social or governance factors;
- permitting terminating plan members to initiate a direct transfer of their lump-sum pension entitlement toward the purchase of a life annuity, if allowed under the terms of their plan;
- exploring options to handle the benefits of unlocated members of plans that are wound up, so that full and partial windups may be completed; and
- updating regulatory requirements to reflect recent changes to standards issued by professional bodies, such as new actuarial standards of practice and the recent adoption of International Financial Reporting Standards by Canada's Accounting Standards Board.
The government also discussed the concerns of Ontario pensioners affected by the termination of the Nortel pension plans. Proposed amendments to the Pension Benefits Act would allow Nortel pensioners to opt out of the current windup process and transfer the lump-sum value of their pensions to a life income fund. This is consistent with what is currently available to plan members who are not yet in receipt of a pension, and those who choose to transfer their pensions will be able to select their own investment strategy, subject to any limits under the federal Income Tax Act.
Another notable inclusion in the budget is that the government reiterated its commitment to review options for making modest enhancements to the Canada Pension Plan with the federal, provincial and territorial finance ministers during the summer of 2011.