Ontario set to move on pension reforms
TORONTO - Ontario will move ahead with the first part of its pension reform next month as it seeks to get plans on more solid footing and ensure consistency across provinces.
Finance Minister Dwight Duncan said he was generally supportive of federal changes announced this week, but added they only addressed a small segment of pensions.
Ontario's plans, he said, will look at provincially regulated pension funds to find ways to deal with the fact that the majority of people in Ontario don't have a pension plan.
"It's not just about pensions, it's about post-retirement income," said Duncan.
"In a broad sense, this is designed to enhance protection of pensioners and employees in current plans."
Duncan wouldn't get into specifics of the legislation but said it will largely be based on recommendations made by Harry Arthurs, former president of York University in Toronto.
The Arthurs Report, released late last year, recommended that the province enhance its pension guarantee fund and appoint a full-time pension advocate, among several other things.
The province's reforms will come in two stages: the first in November and the second sometime in 2010.
The first part of the plan, at least, will not be dealing with the specifics of the existing pension benefits guarantee fund, which provides the province's pensioners with up to $1,000 a month in the event a plan fails to provide its full benefit, or any at all, Duncan said.
Ontario is the only province that has a pension benefits guarantee fund, which is funded by corporate contributions. The government has no legal obligation to top it up, but Ontario has admitted that with only about $100 million in funds, the pension guarantee fund is dramatically under-funded.
"There will likely still be some differences but I think when the process is complete you'll see a much more harmonized system of pension regulation across the country," said Duncan.
Most of the new federal measures only affect the plans that are under federal jurisdiction, such as airlines, telecommunications firms and railways.
Ottawa's announcement came days after hundreds of Nortel Networks workers demonstrated on Parliament Hill demanding that Ottawa get involved in guaranteeing their pensions.
Public and private pension plans across the country have taken a massive hit from the combination of the financial crisis and historically low interest rates, at the same time that the recession has pushed many companies into bankruptcy -- with some pensioners left in the lurch.