Ontario Introduces New Pension Framework for Workers

The Ontario government has announced the implementation of a permanent framework for target benefit pension plans, set to take effect on January 1, 2025. This framework aims to support the sustainability of multi-employer pension plans and encourage more employers to offer these plans. Target benefit pension plans provide a predictable monthly income in retirement for workers, while maintaining a consistent cost for employers. These plans are often established by unions or associations within specific industries, particularly in the skilled trades sector.

The framework includes measures to enhance governance, improve communication with plan members, and better manage plan funding. The government will monitor the implementation to ensure it meets the needs of workers and retirees. Multi-employer pension plans wishing to convert to target benefits can apply for regulatory consent starting in 2025.

Currently, Ontario has 68 multi-employer pension plans with over one million participants and nearly $48 billion in assets. The government conducted consultations with the sector before finalizing the regulations for this new framework.