OPTrust submits recommendations to Ontario Expert Commission on PensionsPosted: October 19, 2007
October 19, 2007 – The OPSEU Pension Trust (OPTrust) has offered a set of proposals to strengthen defined benefit pension plans in Ontario. OPTrust’s proposals would also help extend coverage to workers and employers that don’t currently have access to an occupational pension plan.
The recommendations are included in OPTrust’s written submission to the Ontario Expert Commission on Pensions. The Commission began public hearings this week into the legislation and regulations governing of Ontario’s pension industry.
“With our aging population, Ontario faces growing concerns that many workers may not have adequate savings for their retirement,” said Jordan Berger, Chair of OPTrust’s Board of Trustees.
“Workplace pension plans – and defined benefit plans in particular – remain the best way to provide workers with a secure retirement income. They offer employers an important way to attract and retain a skilled workforce in a competitive labour market. And they are a key tool for the Province as it deals with the challenges of an aging workforce.”
OPTrust’s recommendations for strengthening Ontario’s pension sector include:
- Promoting joint sponsorship as a way of building a “pension partnership” between workers and employers in which they share responsibility for plan governance and for its financial risks and rewards
- Exploring ways to reduce the impact of current plan solvency regulations, which can impose undue financial burdens on sponsors even when there is no risk that their plans will be wound up
- Encouraging plans to set aside a portion of any surpluses into contingency reserves to help reduce the impact of future funding deficits
- Supporting the call to raise or eliminate the 10 per cent cap on plan surpluses, established under the federal Income Tax Act
- Promoting the establishment of new multi-employer pension plans to offer private sector employers access to large, well-managed pension plans at a lower cost and with lower risk than a single-employer plan
- Broadening the mandate of existing public sector plans to offer coverage to a wider range of employers in Ontario’s broader public sector
- Updating the rules for the division of pension assets following marriage breakdown.
Many of OPTrust’s 29 recommendations reflect its own success in administering the OPSEU Pension Plan, which is jointly sponsored by the Government of Ontario and the Ontario Public Service Employees Union. OPTrust serves more than 77,000 plan members and pensioners and manages investment assets of $13.1 billion.
“It has been more than 20 years since the last comprehensive review of Ontario’s Pension Benefits Act,” Berger said. “The establishment of the Expert Commission is an important opportunity to modernize Ontario’s pension system and increase workers’ financial security in their retirement.”
The Expert Commission was appointed in late 2006. Its mandate includes reviewing the province’s Pension Benefits Act, the rules governing the funding, deficits and surpluses of defined benefit pension plans, and other issues relating to the security, viability and sustainability of the pension system in Ontario.
The commission’s public hearings are scheduled to continue until November 15, 2007. It is expected to release its final report in the summer of 2008.
For more information:
- OPTrust’s Submission - Planning for the Future: Strengthening Ontario’s Defined Benefit Pension System
- Ontario Expert Commission on Pensions