The Ontario government has unveiled a package of technical changes for pension plans, but has deferred decisions about many high-profile areas of reform, including proposals to create a new supplementary pension system.
The changes announced yesterday include new rules to make it easier for companies to transfer pension assets when they restructure portions of their operations; changes to protect pension benefits for people who are laid off; and new requirements for pension plan sponsors to give more information to members about a plan's funded status.
But the package is notable for the issues that are not mentioned - including questions about expanding coverage to more workers without workplace pension plans, which is to be discussed by Canadian finance ministers at a summit in Whitehorse next week.
The package also is silent on proposals to assist retirees whose payments are reduced when companies go bankrupt, and on suggestions the province should boost coverage for workers under its Pension Benefits Guarantee Fund.
Finance Minister Dwight Duncan said the package is the first of two bills he plans to introduce on pension issues. He said reforms next spring will deal with contentious issues, such as requiring companies to do a valuation of the solvency of their plan every year instead of every three years.
"We want to get the easier things done and out of the way and then focus on the more contentious issues," he said.
The proposals unveiled yesterday respond to many of the recommendations tabled a year ago by an expert commission led by former York University president Harry Arthurs. He said he is pleased to see action on his report, noting the changes outlined follow his panel's proposals. "I've been quite impressed with the fact they seem to be working away quite straightforwardly - I've had other reports which didn't fare so well," he added.
Conservative MPP Norm Miller noted that Mr. Duncan introduced the bill just before the legislature adjourned for the winter break, and a year after Mr. Arthurs made his recommendations. "What took the government so long?"
Companies had been seeking more time to finance shortfalls in their pension plans, arguing the current rule requiring shortfalls to be repaid within five years is onerous.
Pension consultant Ian Markham said many of yesterday's changes will help pension plan members more than employers, adding: "Employers are going to say they're still waiting for the big stuff."
But pension lawyer Mitch Frazer said the legislation does address key technical problems that people working in the industry have been most keen to see fixed. These include problems related to wind-ups of portions of plans when a company sells a division or cuts a large part of its work force.
"This is great for pension experts; these are all the technical things that we've wanted for 10 years," Mr. Frazer said.
For employees, one of the key changes is an amendment to make it easier for laid-off workers to qualify for early retirement benefits, said pension lawyer Hugh O'Reilly.
