Human Resources Legislative Update

Ontario Proposes Plan Administrator Disclosure Obligations, Proclamation Dates

Hicks Morley — Mon, 14 May 2012 15:39:17 -0500

On May 14, 2012, the Ontario government published additional draft amendments to General regulation 909 under the Pension Benefits Act (“Act”), and further proposed a proclamation date of July 1, 2012 in respect of certain amendments to the Act.

The regulatory amendments would specifically outline the information plan administrators are required to disclose, including:

“prescribed records” for the purposes of subsection 29(5) of the Act (relating to requests for the most recent plan documents to be mailed or sent by electronic means);
prescribed documents that “specified persons” are entitled to inspect at the office of the Superintendent of Financial Services for the purposes of paragraph 2 of subsection 30(1) of the Act; and
investment information summary filing obligations of plan administrators, where the plan provides defined benefits.

The government also proposed a proclamation date of July 1, 2012 in respect of the following provisions:

s. 30.1 of the Act permitting plan administrators and the Superintendent of Financial Services to send notices, statements and other records via electronic means, with the consent of the recipient; and
s. 50 of the Act increasing the limit for small pension payouts.

The proposed proclamation date would coincide with the intended proclamation date for provisions regarding grow-in benefits, immediate vesting and elimination of future partial wind ups, which was announced in Budget 2012.

Stakeholders are invited to submit feedback on these proposals by June 1, 2012.

For more information about recent amendments to General regulation 909, please see our FTR Now of May 9, 2012, “Implementation of Key Pension Reforms is Imminent,” and our blog posts of May 3, 2012, Ontario Releases Proposed Grow-In Benefit Regulations and April 30, 2012, Long-Awaited Grow-In, Regulatory Pension Reforms Released.

Ontario WSIB Funding Changes Announced on Heels of Arthurs Report

Hicks Morley — Fri, 04 May 2012 14:25:17 -0500

On May 4, 2012, the Ontario government announced that it would file a new regulation under the Workplace Safety and Insurance Act, 1997, to require the insurance fund of the Workplace Safety and Insurance Board ("WSIB") to reach sufficiency of 60 per cent funding in 2017, 80 per cent funding in 2022 and a full 100 per cent funding by 2027. Also announced were benefit increases to injured workers on partial disability by 0.5 per cent in 2013 and another 0.5 per cent in 2014.

This announcement was in response to the WSIB Funding Review chaired by Professor Arthurs and its resulting report entitled "Funding Fairness: A Report on Ontario's Workplace Safety and Insurance System."

As previously reported, the Funding Review was established to consider policy issues relating to the financial future of the WSIB, including a plan on how to eliminate its unfunded liability.

Ontario Anti-Bullying Bill Referred to Committee

Hicks Morley — Fri, 04 May 2012 10:37:40 -0500

On May 3, 2012, Bill 13, the Accepting Schools Act, 2011, passed at Second Reading and was ordered referred to the Standing Committee on Social Policy.

As previously reported, Bill 13 is intended to address the issue of bullying in schools, and would, if passed, amend the Education Act to include a definition of bullying, new requirements for school boards to implement anti-bullying policies, and the prevention of bullying in schools in the provincial code of conduct, among other matters. The legislation would also authorize the Minister to establish policies and guidelines with respect to disciplining pupils who engage in bullying, sexual assault, gender-based violence and incidents based on homophobia, among other things. It would further authorize the Minister to establish policies and guidelines with respect to bullying prevention and intervention in schools.

Bill 13 was introduced at First Reading on November 30, 2011. On the same day, the Progressive Conservative Party tabled Bill 14, the Anti-Bullying Act, 2011; it appears that the Progressive Conservative Party re-introduced a substantively identical version of that Bill on May 2, 2012, as Bill 80, the Anti-Bullying Act, 2012.

Under a majority government, a government Bill receives priority in the House over private member Bills; generally, government Bills pass, whereas private member Bills do not. In the current minority situation, more than one Bill on the same issue has been introduced to the House, and it remains to be seen whether Bill 13, as introduced, will pass, or whether it will be modified to garner the support of the House.

We continue to monitor the progression of these two Bills closely, and updates will appear on a regular basis in this blog.

Ontario Releases Proposed Grow-In Benefit Regulations

Hicks Morley — Thu, 03 May 2012 15:57:34 -0500

Further to the release of pension reform proposals, on Thursday, May 3, 2012 the Ontario government published additional draft amendments to General regulation 909 under the Pension Benefits Act ("Act").

As anticipated, the draft regulations prescribe additional “activating events” or circumstances that would trigger grow-in benefits for the purpose of s. 74(1), paragraph 3 of the Act, establish how and when jointly-sponsored pension plans (“JSPPs”) and multi-employer pension plans (“MEPPs”) may elect to “opt-out” of providing grow-in benefits or rescind an election, and clarify the rules regarding the Superintendent’s power to order a wind up of a plan, in certain circumstances, among other matters.

Stakeholders are invited to submit feedback on these proposals by June 1, 2012.

We are in the process of reviewing the proposed regulations, and a more detailed FTR Now discussing the implications of these changes for employers and plan administrators will be available shortly on our website.

Long-Awaited Grow-In, Regulatory Pension Reforms Released

Hicks Morley — Mon, 30 Apr 2012 16:17:01 -0500

On Monday, April 30, 2012, the Ontario Ministry of Finance published long-awaited, proposed regulatory amendments under the Pension Benefits Act (“Act”), including additional, proposed prescribed “activating events” for the purposes of grow-in benefits that come into force on July 1, 2012, for public commentary.

A number of key amendments to O. Reg. 909 (General) will:

enable the proclamation of the “retired member” provisions in the Act (all references to “members and former members” throughout O. Reg. 909 will be clarified to refer to “members, former members or retired members”);
implement immediate vesting for plan members and increase the threshold for the small pension payout rule (sections relating to refunds and transfers of pension benefits will be amended to reflect that all benefits are immediately vested and the requirements for prescribed statements will be adjusted to require statements that all benefits are vested, with exceptions for small benefits);
further clarify the surplus payment rules (the provisions will be amended, consistent with the Act, to remove the requirement that the employer establish a contractual entitlement to surplus, and eliminate the requirement that an application include a contribution attribution analysis); and
reflect changes to the Income Tax Act (Canada) regarding Individual Pension Plans (“IPPs”) (the Regulations will clarify that IPPs will be treated similarly to designated plans).

O. Reg. 909 will also be amended to update the references to the section of the Standards of Practice of the Actuarial Standards Board, published by the Canadian Institute of Actuaries, to be used when calculating members’ commuted value, and to revise the provisions governing the crediting of interest on contributions made by members to clarify the basis for the interest to be credited and the timing for crediting of interest. A number of other housekeeping amendments to O. Reg. 909 have been proposed, including the removal of historical provisions relating to solvency funding relief for specified plans.

A second series of proposals would, among other matters, provide details relating to the ability to “grow-in” to enhanced early retirement benefits for most involuntarily terminated plan members. As previously reported in our FTR Now of May 19, 2010, “Implementing Phase One Of Ontario Pension Reform: A Roadmap For Plan Sponsors And Administrators,” Bill 236 amended the Act to, in part, extend so-called “grow-in” benefits to all involuntary “without cause” terminations for plan members who have 55 age plus service points, effective July 1, 2012.

The new proposals prescribe additional “activating events” or circumstances that would trigger grow-in benefits for the purpose of s. 74 (1), paragraph 3 of the Act, including where an employer has given notice of termination of employment to an employee and that person decides to end his or her employment within 60 days in advance of the termination date.

Under the Act, when amended, termination will not be an “activating event” if the termination is a result of wilful misconduct, disobedience or wilful neglect of duty by the member that is not trivial and has not been condoned by the employer. The new proposals identify additional circumstances in which a termination will not be an activating event, including:

where the member is an employee who was hired on the basis that the employment would end on expiry of a definite term or contract or on the completion of a specific task;
where the member is a construction employee, as defined in O. Reg. 285/01 of the Employment Standards Act, 2000; and
where the member is an employee who is on a temporary lay-off, as defined in subsection 56(2) of the Employment Standards Act, 2000.

The proposals further establish how and when jointly-sponsored pension plans (“JSPPs”) and multi-employer pension plans (“MEPPs”) may elect to “opt-out” of providing grow-in benefits, or rescind an election. Specifically, within one calendar year of section 74.1 coming into force, existing MEPPs and JSPPs may elect to opt-out of providing grow-in benefits. Newly established MEPPs and JSPPs will be able to file an election within one calendar year of the date of registration or certification, respectively. A MEPP or JSPP may rescind the election at any time, on a prospective basis, by filing a notice with the Superintendent.

Finally, the proposal would amend the Act to clarify that the Superintendent may still be allowed to order a wind up of a plan if:

the plan has no members (i.e. it has only former members, retired members and beneficiaries who are not members); or
members of the pension plan no longer accrue pension benefits or ancillary benefits under the plan and employees are no longer allowed to become members of the plan under section 31 of the Act.

Stakeholders are invited to submit feedback on these proposals by June 1, 2012. It is anticipated that additional regulatory amendments will be published in the coming months to give effect to ongoing pension reforms.

We are in the process of reviewing the proposed amendments, and a more detailed FTR Now discussing the implications of these changes for employers and plan administrators will be available shortly on our website.

Federal Budget Implementation Bill Introduced (C-38)

Hicks Morley — Fri, 27 Apr 2012 15:40:33 -0500

On April 26, 2012, the federal government introduced Bill C-38, Jobs, Growth and Long-term Prosperity Act, omnibus legislation intended to give effect to certain key initiatives outlined in its Budget 2012.

Among other matters, Bill C-38 would, if passed,

amend Part I of the Canada Labour Code (“Code”) to require each party to a collective agreement to file a copy of the agreement with the Minister of Labour “immediately after it is entered into, renewed or revised,” subject to the regulations, as a condition of its coming into force;
amend Part III of the Code to generally require employers that provide benefits to their employees under long-term disability plans to insure those plans. As an exception, however, a new subsection 239.2(2) would allow for an employer to not insure long-term disability benefits under circumstances and subject to the conditions provided for in the regulations. Uninsured long-term disability benefits that are in pay and long-term disability benefits in respect of claims initiated prior to the coming into force of these amendments may, as a transitional measure, continue to be provided on an uninsured basis;
in addition to a general and significant increase in maximum fines for first, second and subsequent offences under section 256(1) of the Code, Bill C-38 would specifically increase maximum fines for non-compliance with the above long-term disability provisions, the employer obligation to provide wage replacement to an employee who is absent from work due to work-related illness or injury section in section 239.1(2), or Group Termination of Employment regulations (section 227) to a fine of not more than $250,000;

amend the Department of Human Resources and Skills Development Act to establish the Social Security Tribunal and to add provisions authorizing the electronic administration or enforcement of programs, legislation, activities or policies, including those the Canada Pension Plan, the Old Age Security Act and the Employment Insurance Act;
repeal the Fair Wages and Hours of Labour Act, which relates to wages and hours of labour in relation to public works and contracts;
amend the Old Age Security Act to gradually increase the age of eligibility for the Old Age Security Pension, the Guaranteed Income Supplement, the Allowance and the Allowance for the Survivor and to allow individuals to voluntarily defer their Old Age Security Pension up to five years past the age of eligibility, in exchange for a higher, actuarially adjusted, pension.

Generally, the Bill C-38 amendments highlighted above would come into force on a day or days to be fixed by order of the Governor in Council.

For more information about Budget 2012, see our FTR Now, “Federal Budget 2012 – Highlights for Employers.”

Regulation Proposed To Extend Filing Deadlines of Public Sector, BPS Pension Plans

Hicks Morley — Fri, 27 Apr 2012 11:36:21 -0500

The Ontario government has proposed an amendment to Regulation 909 made under the Pension Benefits Act, Filing Extension for Certain Pension Plans in the Public Sector and Broader Public Sector. This regulation would extend the timeframe for these pension plans to file their actuarial valuation reports and extend the time for the commencement of special payment schedules established in the report, subject to other relief measures that the plan would elect to take.

The filing extension would apply to a public sector pension plan that:

falls within the definition of “public sector plan”;
is not a jointly sponsored pension plan;
is not a multi-employer pension plan;
provides defined benefits;
has at least 25% of total membership that are active members as of the valuation date that continue to accrue defined benefits under the plan; and
is required to file its valuation report on or after June 1, 2012 and before February 27, 2013.

The filing date for these plans would be extended to February 28, 2013.

Any comments on this proposed regulation are due by June 11, 2012.

Education Act Regulatory Amendment Filed (Honoraria)

Hicks Morley — Wed, 25 Apr 2012 14:08:33 -0500

On April 18, 2012, the Ontario government filed an amendment to O. Reg. 357/06 under the Education Act (Honoraria for Board Members).

O. Reg. 57/12 adds a new Part II (Rules For The Period From April 1, 2012 To March 31, 2014), imposing a temporary limit on honoraria for a chair, vice-chair or other member of a district school board. Specifically, an honorarium “shall not exceed the maximum amount that was payable to a member with that office during the period in which the restraint measures under sections 7 to 11 of the Public Sector Compensation Restraint to Protect Public Services Act, 2010 applied.”

The amendment is now in force.

Ontario Announces Consultations on Public Sector Pension Plans

Hicks Morley — Wed, 25 Apr 2012 11:42:39 -0500

The Ontario government has announced that it will begin consultations on a new legislative framework for jointly sponsored public sector pension plans. Further to its 2012 Budget reform proposals, the proposed framework will include as follows:

in case of a new funding deficit, plans would be required to reduce future benefits or ancillary benefits before increasing employer contributions;
in exceptional circumstances, a limit would be set on the amount or value of benefit reductions before contribution increases could be considered;
where employee contributions are currently less than employer contributions, increased employee contributions would be available as a tool to reduce pension deficits; and
where plan sponsors cannot agree on benefits reductions through negotiation, a new, third-party dispute resolution process would be used.

Benefit reductions, if any, would involve future (not accrued) benefits and current retirees would not be affected.

Representatives of affected groups will be consulted on this proposed legislative framework.

Retirement Homes Act Provisions Come Into Force

Hicks Morley — Mon, 23 Apr 2012 16:00:35 -0500

Effective April 15, 2012, certain provisions of the Retirement Homes Act came into force, including sections 34 to 49 of Part III (Licence to Operate a Retirement Home). Sections dealing with safety standards and compliance, staff skills, prescribed qualifications and training as well as Orders of the Registrar and Appeals (Part V), among other matters, will come into force on July 1, 2012.

Certain other provisions will come into force January 1, 2013, July 1, 2013 and January 1, 2014. Specific coming into force information is available in the April 21, 2012 Ontario Gazette, or on e-laws.

As previously reported, the amendments were outlined in Bill 21, New Retirement Homes Act, 2010, legislation introduced on March 30, 2010 providing legislative protection for seniors living in retirement homes.