(August 1 – 11:00 ET) – The Financial Services Commission of Ontario wants to clarify its position on solvency funding for multi-employer pension plans (MEPPs).
FSCO says it is concerned that there’s some confusion over MEPP solvency, and that there have been public statements indicating that pension legislation doesn’t require solvency funding.
“This is not accurate,” FSCO says in a letter from superintendant and chief executive Dina Palozzi. She notes that the law requires that a report filed for a MEPP include, “a demonstration by the actuary that the contributions required by the collective agreements are sufficient to provide the benefits set out in the plan, without considering any provision for reduction of benefits.”
“It has always been, and continues to be our view that [this demonstration], when combined with the requirements for reports, must be on both a going concern and a solvency basis.”
In cases where contributions will not be enough to cover benefits, the actuary is required to identify options available to the plan administrator that will result in sufficient contributions. The administrator must then inform the superintendent of the action taken to ensure solvency.
-IE Staff