Ontario proposes new PBGF-related requirements for valuation reports
On April 15, 2021, Ontario introduced proposed regulatory amendments that would require administrators of Ontario-registered defined benefit pension plans to provide certain additional information regarding their plans’ Pension Benefits Guarantee Fund (PBGF) assessments. The government’s intention to introduce these regulations was previously announced in the 2021 Ontario budget.
The proposed amendments to the Ontario regulations would require every valuation report filed in respect of a PBGF-eligible pension plan to include the following additional information:
- The amount of the solvency liabilities related to Ontario beneficiaries in respect of pensions or accrued pension benefits that are less than or equal to $1,500 per month (called the “modified PBGF liabilities”).
- The number of Ontario plan beneficiaries (including those who are receiving and who have accrued pension benefits under the plan).
- The number of Ontario plan beneficiaries at or below the $1,500 guarantee amount.
- The 10th, 20th, 30th, 40th, 50th, 60th, 70th, 80th and 90th percentiles of the amounts payable under the plan to Ontario plan beneficiaries (i.e., the amount that is greater than 10%/20%/30%/etc. of the pensions and accrued pension benefits payable under the plan, determined by reference to all pensions and accrued pension benefits).
- For each percentile that is required to be calculated, the amount of the PBGF liabilities that relates to Ontario plan beneficiaries in respect of all pensions and accrued pension benefits that are less than that percentile (i.e., the amount of solvency liabilities that relates to the smallest 10%/20%/30%/etc. of all pensions and accrued pension benefits).
- The amount of the largest pension benefit that has accrued under the plan to an Ontario plan beneficiary.
Ontario says that adding the additional required information will provide it with the data necessary to estimate the extent to which Ontario plan beneficiaries are protected by the PBGF. The intended effective date of the new requirements has not been announced.
The Ontario Ministry of Finance is accepting comments on the proposed regulatory amendments until May 31, 2021.