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Ontario Contains Public Sector Pension Costs

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Ontario Contains Public Sector Pension Costs

McGuinty Government Signs Deals with Pension Plan Partners

Ministry of Finance

Ontario has reached agreements with three public sector pension plans that freeze contribution rates for five years, except in exceptional circumstances.

In May, the government launched consultations with pension plan partners on how to keep the plans stable while also protecting plan members and containing costs for taxpayers.  After 100 hours of consultations and negotiations, agreements have been reached with plan partners of the following Jointly Sponsored Pension Plans (JSPPs):

  • The Healthcare of Ontario Pension Plan
  • The Ontario Public Service Employees Union Pension Plan
  • The Colleges of Applied Arts and Technology Pension Plan.

The agreements will help ensure these pension plans do not add to employer and taxpayer cost if addressing a new funding shortfall.  The 2012 Ontario Budget stated that the government would consult with its partners and would then introduce appropriate legislation to help achieve these objectives. Given the agreements announced today, this means that legislation will not be necessary in relation to these specific plans. 

Keeping taxpayer contributions to JSPPs stable is part of the McGuinty government's plan to eliminate the deficit while protecting jobs and public services.

Quick Facts

  • A plan that experiences a new funding shortfall during the five-year period would be required to reduce future benefits, up to a limit, before further increasing employer contributions.
  • Any benefit reductions necessary to address a new deficit during that period would apply to future benefits only, not those that have already been accrued. Current retirees would not be affected.
  • Pension costs have been one of the fastest-growing line items in the budget. These rising costs, made worse by the impact of the global recession and the low interest rate environment, make it more difficult to balance the budget and maintain the results achieved in health care and education.
  • Most of Ontario’s largest public sector pension plans are jointly sponsored. In these plans, decisions on benefits and contributions are shared between employer sponsors and representatives of plan members. As well, plan members make contributions to pay for the benefits they are earning and are responsible for sharing in the cost of funding any deficits. In most cases, plan members pay for half the cost of their benefits, with the employer matching plan members’ contributions.
  • Ontario’s pension funds are recognized as some of the best-managed funds in the world – a reputation developed through continued commitment to world-class governance and professional investment management.

Additional Resources


“These agreements confirm what the McGuinty government has always maintained: when our partners are willing, we can reach goals that benefit Ontario families, protect jobs and public services. These deals will protect plan members and help Ontario eliminate the deficit by 2017-18.”

Dwight Duncan

Minister of Finance

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