The Ministry of Finance posted a document describing the proposed regulations related to the funding framework for eligible multi-employer pension plans that provide target benefits (TB MEPPs) announced by the government on June 29, 2017.
The document includes:
- Descriptions of new going concern rules, including how the provision for adverse deviations will be determined and applied;
- Funding rules for benefit improvements;
- The contribution sufficiency test; and
- The new basis for determining commuted value payments and transition rules.
The rules would apply to eligible MEPPs that convert defined benefits into target benefits under the rules outlined in section 81.0.2 of the Pension Benefits Act as well as to any newly established TB MEPP. The proposed TB MEPP funding framework is intended to ensure the plans are healthy and sustainable over the long term. Consistent with actuarial literature the proposed rules are intended to provide a reasonable likelihood that a fully funded MEPP with typical specified Ontario multi-employer pension plan (SOMEPP) characteristics would remain fully funded after 3 years.
The Ministry of Finance is seeking feedback on all aspects of the proposed TB MEPP funding rules so they can best achieve the government's objectives of helping to ensure that the plans are sustainable over the long term.
Comments are Due May 4, 2018.
Feedback on issues relating to funding rules for TB MEPPs can be submitted electronically or mailed to:
Target Benefit Funding Framework
Pension Policy Branch
Ministry of Finance
5th Floor, Frost Bldg S.
7 Queen's Park Crescent
Toronto, ON M7A 1Y7