Securing Our Retirement Future
McGuinty Government Strengthens Pension Benefits Guarantee Fund
Beginning January 1, 2012, the government will:
- Establish a minimum assessment level of $250 for each covered plan;
- Raise the base fee per plan member from $1 to $5;
- Increase the maximum fee per plan member in underfunded plans from $100 to $300;
- Eliminate the overall assessment cap, currently $4 million, for underfunded plans; and
- Extend the initial waiting period for PBGF coverage of new plans and benefit improvements from three to five years.
These changes will help to make the PBGF more sustainable by reducing the size of claims and ensuring it has sufficient funds to cover them. PBGF assessments are paid by the company or organization that sponsors the pension plan, not employees.
- Since 1980, the PBGF has provided pensioners and plan members with benefit protection if plans are wound up with insufficient funds to cover promised benefits.
- The fund is the only one of its kind in Canada.
- The PBGF "tops up" the first $1,000 per month of certain defined benefits for members in Ontario if a plan is wound up with insufficient assets and the employer sponsor is unable to fund the pension shortfalls.
- The government intends to introduce additional reforms to modernize pensions as well as reduce the risk to the PBGF, such as strengthening funding rules for pension plans.
“Our government continues to strengthen the Pension Benefits Guarantee Fund to protect the pensions of Ontario's plan members and retirees. We will implement this strategy as we move forward with a plan to modernize Ontario's pension system.”