Ontario proposes to extend solvency funding relief in broader public sector
The Ontario Ministry of Finance has proposed on October 22, 2015 to extend Stage 2 solvency funding relief to more defined benefit pension plans in the broader public sector ("BPS").
All plans that enter Stage 2 solvency funding relief may make special payments in respect of solvency funding requirements over a 10 year period. Under the current rules, only plans that entered Stage 2 prior to December 31, 2014 are permitted to make interest-only payments over the first three years of that 10 year period and amortize the remaining deficit over the final seven years. The proposed regulation will extend this option to all plans that enter Stage 2, even those that enter after December 31, 2014.
The proposal will be welcome news for Ontario defined benefit plan sponsors who take advantage of solvency funding relief provisions for the BPS after that date.
Comments by interested parties could be submitted until November 16, 2015.