Putting University Pension Plans On A Sustainable Track
McGuinty Government Announces Temporary Pension Solvency Relief
Ontario universities are being offered more time to pay down their pension solvency deficits, provided they take steps to make their pension plans more financially sustainable.
The government will introduce amendments to the regulation under the Pension Benefits Act to create a two-stage pension solvency relief plan for eligible universities.
To access the first stage, which is three-year solvency relief, universities must submit a plan to the Ministry of Finance outlining how they will make their pension plans more sustainable. This three-year period will give universities time to work with pension plan members and their representatives to develop a plan that ensures long term pension sustainability. Following this timeframe, universities that have demonstrated an improved and sustainable plan would then be eligible for stage two pension solvency relief, allowing them to amortize their solvency deficits over a period of up to 10 years.
Ontario will not provide additional funding to cover university pension deficits. This pension solvency relief will help protect front-line public services in the university sector, which is vital to supporting quality education for Ontario's students. It will minimize the need for significant solvency deficit payments in the short term and place pension plans on a more sustainable track for the long term.
- Ontario passed the Pension Benefits Amendment Act in May, the first significant reform in over 20 years.
- Ontario introduced solvency relief measures for all pension plans in 2009 - a measure designed to protect jobs and families during rapidly changing economic conditions.
“Universities will have three years to work with their employees to restructure their pension plans and put them on a sound footing for the future. These measures will ensure that universities address their pension issues so that government funding will continue to support a quality education for our students.”
“Since 2008 we have talked about the broader need for a more secure retirement income system- of which pensions is one part. With our two-stage approach for this sector, we expect universities will address their pension deficits with sound plans that put them on a sustainable track and that allow them to continue to provide Ontarians with access to high-quality postsecondary education.”