New DB Pension rules should support business competitiveness
The Ontario Chamber of Commerce (OCC) has provided a submission to the Ministry of Finance’s review of the province’s solvency funding rules for providers of Defined Benefit (DB) pension plans.
As outlined in the submission, Ontario’s current rules place significant financial pressure on DB plan sponsors and have made the provision of DB pension plans increasingly unaffordable relative to other jurisdictions. Sponsors cannot continue to offer these plans if contribution requirements become prohibitively expensive.
To improve the competitiveness of businesses and enhance the sustainability of the province’s existing DB pension plans, the OCC has encouraged the government to eliminate the current solvency rules and adopt a strengthened going concern approach.