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Consultations On Public Sector Pension Plans Begin

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Consultations On Public Sector Pension Plans Begin

McGuinty Government Making Public Sector Pensions More Sustainable, Affordable

Ministry of Finance

Ontario begins consultations on a new legislative framework for jointly sponsored public sector pension plans.

As announced in the 2012 Budget, the government is proposing reforms to the framework that governs public sector pension plans to make them more sustainable for members and more affordable for taxpayers.

The proposed framework will include the following:

  • In case of a new funding deficit, plans would be required to reduce future benefits or ancillary benefits before increasing employer contributions.
  • In exceptional circumstances, a limit would be set on the amount or value of benefit reductions before contribution increases could be considered.
  • Where employee contributions are currently less than employer contributions, increased employee contributions would be available as a tool to reduce pension deficits.
  • Where plan sponsors cannot agree on benefit reductions through negotiation, a new, third-party dispute resolution process would be used.

Any benefit reductions would involve future benefits only, not those that have already been accrued. Current retirees would not be affected. A review of the new framework will be conducted after Ontario's budget is balanced.

The McGuinty government is committed to building upon Ontario's internationally recognized jointly sponsored pension plan model to make the management of public sector pensions even stronger.  

Quick Facts

  • Representatives of affected groups will be consulted on the proposed legislative framework. The government proposes that measures used to improve plan funding do not add to employer and taxpayer costs, beyond what has already been agreed to.
  • Most of Ontario's largest public sector pension plans are jointly sponsored. In a jointly sponsored pension plan, decisions on benefit levels and contributions are shared between an employer and employees. While the model works well, the cost of providing these benefits has increased significantly and is projected to continue to rise. The government is committed to reducing the growth in the cost of providing these benefits.
  • The government also will consider a variety of tools to enhance the sustainability of single-employer, defined benefit pension plans in the public sector.
  • The government intends to introduce a legislative framework in Fall 2012 that would pool investment management functions of smaller broader public sector pension plans to help put them on more secure footing.

Additional Resources


“These measures are part of the government's five-year plan to keep Ontario on track to balance the budget by 2017-18 while ensuring long-term sustainability of core public services. By transforming the public and broader public sectors, we are taking strong action to protect the gains we have made in education and health care while building a better future.”

Dwight Duncan

Minister of Finance

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