Earlier in December, Provincial Finance Minister Dwight Duncan announced the Pension Benefits Amendments Act, 2009. We wrote about these amendments in the December Issue of the Employee Benefits Bulletin, by Cowan's Benefits and Retirement Consulting Division, and I thought I would share some of them here.

Although many of these reforms are more relevant to Defined Benefits Pension Plans, the government package includes a number of proposals that will affect Defined Contribution Pension Plans registered in Ontario (which is what most of our clients have).

Proposals relevant to DC plans suggest these reforms would:

• Provide for immediate vesting for members.  Currently, plan sponsors can make employees wait two years before they are entitled to the full value of their pension.
• Eliminate partial wind-ups. A partial wind-up occurs when only part of a pension plan is closed.  This would simplify administration and reduce compliance costs for plan administrators and sponsors.
• Make pension advisory committees easier to establish, allowing members and retired members to monitor plans on an advisory basis. 
• Clarify requirements for plan administration.  For example, the filing of specified documents could be waived for prescribed classes of pension plans.
• Enable plans to restructure more easily, while protecting members' interests.  This would simplify the regulatory approval process while providing more flexibility in commercial transactions, like mergers and acquisitions.
• Allow plan sponsors to amend plan rules to permit phased retirement, a measure that would enhance labour force flexibility and help employers retain valuable employees.

The second stage of Ontario's pension modernization process is planned for 2010.

The EBB newsletter includes many other articles that may be of interest. Click here to read the full newsletter.