Pensions & Benefits Law : Canada Pension & Benefits Lawyers & Attorneys : Osler Hoskin & Harcourt Law Firm: Post-Employment Benefits & Defined Benefit Plans : Toronto, New York

By: Ian J.F. McSweeney and Shaun Miller

On August 24, 2010 the Ontario government announced the second stage of a multi-step process to reform the province’s pension system – the first being the passage of the Pension Benefits Amendment Act, 2010 (Bill 236) on May 5, 2010.

The proposals outlined by the Ontario government build upon the principles announced in Bill 236 and the recommendations proposed by the Expert Commission on Pensions. Please see our May 20, 2010 post for a summary of the first stage of pension reform outlined in Bill 236.

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Bill 236, the first stage of pension reform in Ontario, included amendments to the advisory committee provisions in the Pension Benefits Act. The amendments appear to be aimed at increasing the involvement of pension plan members in plan administration and are directed primarily at single employer plans. Although these provisions are not yet in force, plan administrators should begin considering how they may affect their workplaces.

The pre-reform PBA allows a majority of current and former members to vote to establish an advisory committee comprised solely of member representatives. The purpose of such a committee is to monitor plan administration, make recommendations to the administrator regarding administration and promote awareness of the plan. To date, advisory committees have not been very common – Bill 236 seems to be aimed at changing that.

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As noted in prior blog posts (June 4, 2010 and January 7, 2010) the recent expansion of “grow-in” benefits to all involuntarily terminated employees (except for those who were dismissed for "wilful misconduct")  will have significant implications for employers who sponsor a defined benefit pension plan. Previously, grow-in benefits applied only when a pension plan was being either fully or partially wound up. These amendments will make grow-in benefits applicable to all employees terminated after July 1, 2012, but as discussed in a recent Osler Update: Ontario Employment Terminations: Implications of New Pension “Grow-in” Rules by Jason Hanson, severance packages negotiated now may have to take these amendments into account.

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