Employers believe that greater flexibility for funding to defined benefit pension plans is the most critical issue to address as regulators contemplate pension reforms, a recent survey by Aon Consulting Canada reveals.

In Aon’s Rapid Ready survey, which polled 125 organizations in April, greater funding flexibility was ranked the highest among the aspects of the pension system which must be addressed.

Other issues that employers ranked highly included resolving surplus ownership/asymmetry, increasing uniformity of pension rules, and allowing greater flexibility regarding design.

Of less importance, in the views of employers, was the need to tighten funding rules, expand member disclosure, and expand government pension guarantee programs.

“The results of our survey reinforce what’s been heard from many employers in various consultative forums,” notes Barry Gros, vice president of retirement in Aon’s Toronto office.

“As it currently operates, the two-tailed funding framework of going concern and solvency valuations has fallen short of delivering security for members and flexibility for employers to manage their business during economic volatility. This is an area that needs fresh perspectives and solutions that go beyond a series of temporary funding relief measures.”

Aon said the rapid deterioration of DB pension plans in Canada illustrates how the patchwork of pension regulations has been a constant frustration to national plan sponsors.

Furthermore, it noted that there continues to be a lack of concrete and visible movement towards any form of consensus following recommendations of various expert commissions.

Aon urges the government to carefully consider the concerns of plan sponsors.

IE