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Strengthening Ontario's Pension System

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Strengthening Ontario's Pension System

McGuinty Government Helps Employers Better Fund Pensions and Gives Seniors More Access to Retirement Savings

Ministry of Finance

In response to the current economic challenges, the Ontario government has finalized rules that provide pension plans with solvency funding relief - a measure designed to protect jobs and families.  The initiative was first proposed in December 2008 and committed to in the 2009 Ontario Budget.  Seniors will also be provided more access to money in life income funds (LIFs).

The temporary solvency relief rules allow businesses to spread solvency payments over an extended 10 year period, with the consent of members and retirees, freeing resources for operations, including payroll expenses.  The balanced package of measures also increases transparency, ensuring that workers and retirees have clear information about the financial health of plans and enhances benefit security, through greater oversight of contribution suspensions, also called contribution holidays.

Starting January 1, 2010, Ontarians will have the option to unlock 50 per cent of LIFs, up from 25 per cent.  A LIF is a registered account to which assets from a pension plan have been transferred that is used to provide a steady stream of income in retirement.  This change will provide significant flexibility for seniors who require access to additional funds.

Quick Facts

  • More than 4,100 pension plans in Ontario are eligible to participate in the solvency relief initiative.
  • The solvency relief measure is retroactive to September 30, 2008, for all defined-benefit pension plans. Certain defined-benefit multi-employer pension plans may already benefit from regulations enacted in 2007 that also provided solvency relief.
  • When a pension plan member terminates employment or plan membership before retirement, the commuted value can be transferred directly into a LIF.

Background Information

Additional Resources


“The adequacy of retirement savings is going to be one of the defining issues of our generation. We are taking action to help pension plan sponsors now and for the future, recognizing that the best security for a pension plan - and employees - is a solvent employer. As well, giving people greater access to assets held in their LIFs will help, especially in these tough economic times.”

Dwight Duncan

Minister of Finance

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