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ARTICLE · 24 MAY 2017

Ontario Eases Solvency Funding Requirements

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In a quick follow-up to the measures announced in its 2017 Budget, and following consultations on pension solvency conducted in 2016, the Ontario government has announced proposed changes that will ease the burden on single-employer defined benefit pension plan sponsors.

CanadaEmployment and HR
Kyle Lambert
Kyle Lambert
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In a quick follow-up to the measures announced in its 2017 Budget, and following consultations on pension solvency conducted in 2016, the Ontario government has announced proposed changes that will ease the burden on single-employer defined benefit pension plan sponsors.

The most notable announced change will reduce the present pension solvency funding requirement from 100% to 85% – meaning that sponsors will need to fund plans on a solvency basis should the plan's funded status fall below 85%. The Financial Services Commission of Ontario estimates that 15% of Ontario defined benefit plans will need to fund on a solvency basis under the relaxed rule. 

Other planned changes to Ontario's solvency funding regime include the following:

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