Update: Ontario valuation report filing deadline extended
The Ontario Government has issued a regulation extending the deadline for submitting a valuation report to December 31, 2012. The extension applies to defined benefit pension plans with a valuation date on or after September 30, 2011, and before March 31, 2012.
The extension will allow such plans to file a valuation report taking into account the temporary solvency funding relief measures announced in the 2012 Ontario Budget. The position of the Financial Services Commission of Ontario had been that, since the regulations implementing solvency funding relief have not been published, an administrator would either have to file a valuation report without taking into account the promised relief measures or apply for an extension of the filing deadline.
The temporary solvency funding relief measures will allow plan administrators to elect one or both of the following options when filing the first actuarial valuation report prepared as at a date on or after September 30, 2011, and before September 30, 2014:
- Consolidate existing solvency payment schedules into a new longer five-year payment schedule; and/or
- Extend the solvency payment schedule to a maximum of 10 years (from the current maximum of five years) for a new solvency deficiency determined in the report, subject to the objections of plan beneficiaries.
The Ontario Ministry of Finance has also reiterated its promise to issue regulations implementing permanent changes to funding rules. These permanent funding relief measures will be as follows:
- Permit solvency and going-concern special payments to be amortized beginning one year after a plan valuation date; and
- Allow employers to use irrevocable letters of credit from financial institutions to cover up to 15% of a plan’s solvency liabilities.
We will continue to update you as more information becomes available.