(May 18 – 17:05 ET) – Retirees may receive lower pensions than they should thanks to regulations requiring solvency funding on multi-employer pension plans (MEPs), said Peter C. Hirst, executive vice president of Buck Consultants Limited.
In a speech to a conference sponsored by the International Foundation of Employee Benefit Plans in Ottawa today, Hirst explained that all provinces with pension legislation require solvency valuations on pension plans. These essentially calculate the benefits of the plan as though it were to be wound-up on the valuation date.
The result is “deficiencies” and because MEPs cannot usually increase contributions, he said that the plans must reduce benefits by perhaps 40%, because of this legislation. However, Hirst’s opinion, backed by legal and other expert opinions, is that Ontario regulations quite correctly do not require solvency funding for MEPs.
-IE Staff