Ontario’s Deputy Premier and Finance Minister Jim Flaherty has announced an extension of the Surplus Regulation under the Pension Benefits Act to Dec. 31, 2002.

The existing Surplus Regulation was introduced as a temporary measure to regulate surplus withdrawals from defined benefit pension plans. It was renewed in 2000, pending the development of a more permanent resolution of the issue. The government wants to ensure that when pension surplus is distributed, employers, employees and pensioners are treated fairly.

To this end, the government released a consultation paper entitled Surplus Distribution from Defined Benefit Plans in July 2001. Its core proposals include: surplus sharing based on negotiations between employers, members and pensioners; surplus sharing agreements requiring consent of two-thirds of members and a similar proportion of former members; and a mechanism, on full wind up, to avoid delays in surplus distribution and to provide a process for members and pensioners to prompt surplus withdrawals.

The minister intends to introduce the pension surplus amendments to the act in the spring session. Extending the current Surplus Regulation will allow the province appropriate time to review the submissions and prepare the legislative and regulatory amendments required.