TORONTO - Ontario moved Tuesday to match Ottawa's lead in giving pension plan sponsors relief by doubling solvency payment deadlines to 10 years from five, but analysts expressed concern that retirees and workers must first approve the extension.

Companies are required to pay the full amount into their pensions that would be needed to immediately pay out the entire account. That's left many firms struggling to meet their pension obligations, especially amid upheaval on global financial markets.

The federal Conservatives announced last month that Ottawa would extend the length of time that federally regulated pension plans have to pay into their coffers to avoid funding shortfalls, something Ontario matched Tuesday as part of a package of reforms.

Ontario also announced it would defer the start of so-called catch-up payments to give provincially regulated companies one year of cash flow relief. Several other steps, such as permitting greater flexibility in the use of actuarial gains to reduce annual cash payments by plan sponsors, were also promised.

"We're going quite a bit further than the feds, providing what I would call much greater balance, more opportunity for both management and employee participation, much greater transparency and much greater accountability," said Finance Minister Dwight Duncan.

"It means there'll be less pressure in the short-term to bring up the funding in a pension, which will allow greater time to recover from the market gyrations which we're seeing right now."

However, Ontario's plan to force companies to get the consent of employees and retirees before the repayment schedule can be extended raised concern among experts.

"I think it'll be very difficult for the companies to get the consent," said Paul Forestell with the international consulting firm Mercer.

"I can see the active members having a motivation to consent, but you also need retiree consent, and I personally have trouble seeing why a retiree would consent to it. They have nothing to gain."

Ian Edelist, a pension expert with Eckler Limited and a member of the Canadian Institute of Actuaries, agreed requiring employee consent for a 10-year repayment period could be an issue.

"It's not a bad idea to make sure that employees are very aware of what's going on, as long as the threshold isn't so high that a vocal minority can stop it," said Edelist. "I think it has to be a reasonable threshold as to what the number of objectors could be."

The Office of the Superintendent of Financial Institutions said over two-thirds of federally regulated pension plans were underfunded as of last June, and since then, stock markets have posted huge losses, which means pension plan deficits have grown.

Ontario regulates 4,100 of the 11,000 defined benefit pension plans in Canada, but provincial officials couldn't say how many of those are currently underfunded. Forestell said it was likely that about 80 per cent of provincially regulated plans in Ontario were currently underfunded.

"The best security for a pension plan is a healthy, strong sponsor, and if this helps companies run their business and become stronger, it will benefit everybody involved with the pension plan," he said.

Ontario's plan to defer catch-up payments was the "biggest surprise," said Edelist.

"I think that is great because everyone is saying 2009 is going to be a rotten year for the economy, and it allows companies to plan even longer for the increase in contributions."

The opposition parties said the pension changes were a long time coming.

"Dalton McGuinty has been seemingly paralyzed in the face of increasingly dire economic news," said Progressive Conservative finance critic Tim Hudak. "Finally, they are thawing from their paralysis in acting."

The New Democrats said the legislation should include an increase the Pension Benefit Guarantee Fund from $1,000 to $2,500 per month.

"That would have given greater certainty to workers that they're not going to be left high and dry down the road," said NDP Leader Howard Hampton.

Finance Minister Jim Flaherty said in November that the solvency of pension plans will be on the agenda when he meets with his provincial and territorial counterparts in Saskatoon on Wednesday.