Province Makes Changes to Workers' Retirement Benefits
Employees on pension plans in Mississauga might be glad to know that the province is making some changes that aim to protect retirement benefits.
Currently, almost one million Ontarians rely on defined benefit pension plans for income in their retirement.
With this in mind, employers will firstly continue to be required to ensure pension funds are appropriately funded and to pay into a reserve to protect benefits for workers and retirees.
In addition, employers will be required to make additional contributions if the plan’s funded status falls below a certain level.
"Everyone deserves a secure retirement. By providing more flexibility, defined benefit pension plans will remain a vital part of our retirement income system in Ontario," said Minister of Finance Charles Sousa.
Employers will have greater flexibility in managing their pension contributions, allowing them to plan for their pension costs more easily.
Further, the measures will protect benefit security for plan members and retirees. The monthly guarantee provided by the Pension Benefits Guarantee Fund will be increased by 50 percent, from $1,000 a month to $1,500 a month.
The Pension Benefits Guarantee Fund requires employers to make regular contributions to protect pension benefits in the rare event an employer goes bankrupt and its pension plan is underfunded.
There will be no impact on the pensions that retirees now receive as a result of these changes.
"With these changes, we are also ensuring that pension plans are affordable for businesses and benefit security for workers and retirees is protected," said Sousa.
Legislation will be introduced in the fall to enable these changes and consult on the details of new regulations.