Following the extension of solvency relief to some universities (those that have already qualified for Stage 2 relief), OCUFA has been active on many fronts of the pension file. Notable among these are consulting with government on draft regulations for transferring assets between plans; implementation of the Morneau report recommendations; and the pension coalition research project.
A draft regulation has already been produced to allow for movement from defined benefit plan to another; the regulation currently being developed will allow assets to be moved from a defined benefit or hybrid plan to a jointly sponsored pension plan.
This is a very complex process involving many considerations – how previously earned benefits are maintained or replicated in the new plan, what level of member consent is required to undertake this transfer, the status of the employer protection of past benefits on plan wind-up, whether grow-in benefits are protected (they are not required in a JSPP), and others.
It appears the Ministry of Finance is interested in having this regulation included in the 2014 budget process, which requires that they complete their development work shortly. OCUFA and the other unions in the sector pension coalition have decided to submit a letter to the Ministry outlining our views on the issues we feel are most salient to our members in the development of this regulation. The letter was prepared by our counsel, Murray Gold, and sent in early January.
In September, the Ministry of Finance established a technical working group to provide advice on how to create the new entity to consolidate pension assets in the broader public sector, including what will need to be included in the enabling legislation. It is expected that the group will report to the Minister in 2014. The Ministry of Finance will remain responsible for the remaining social policy questions – whether inclusion will be mandatory or voluntary, which plans will be included, and so on. OCUFA is monitoring the process closely, and will provide analysis of any announcements (in the 2014 Budget or otherwise).
Work continues on the university pension coalition research project on the sustainability of Ontario university pension plans, and options for the future. This research has three main elements:
- Research on the sustainability of existing plans.
- A paper considering the various options for university plans moving forward.
- Development of a straw model for the university sector, that includes the highest industry standards on all plan design elements.
As part of the research mandate of COU and OCUFA, the Ministry of Training, Colleges and Universities has required the organizations to participate in a provincial working group to share the results of our on-going research, and discuss the development of the straw model for a university sector JSPP. Please note that OCUFA is not advocating for a university sector JSPP. Rather, we are simply providing the principles for such a plan, were it to be created. We continue to stress to government that any sector plan must have voluntary entry and exit. The next meeting of the working group will be in late January.