Ontario Introduces Permanent Framework for Target Benefit Pension Plans

The Ontario government has announced the implementation of a permanent framework for target benefit pension plans, effective January 1, 2025. This framework is designed to support the sustainability of multi-employer pension plans, which are commonly used in industries involving skilled trades. These plans allow workers to receive a monthly income in retirement while maintaining job mobility across different employers within the same industry.

The framework was developed following consultations with the sector and aims to provide clear rules and responsibilities for plan members and employers. It includes measures to strengthen plan governance, enhance communication with members, and improve the management of plan funding. Employers wishing to convert their benefits to target benefits can apply for regulatory consent starting in 2025.

Currently, Ontario has 68 multi-employer pension plans with over one million participants and nearly $48 billion in assets. The government will monitor the new framework to ensure it meets the needs of workers and retirees.