Multi-Employer Benefit Plan Council of Canada
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Letter To Benefits Canada Regarding The Funding Rules For Multi-employer Target Benefit Plans In Ontario

April 10, 2018

Thank you for sharing your interpretation of the long-awaited funding rules for multi-employer target benefit plans in Ontario. It is erroneous. We have a number of concerns with the proposed funding rules and are making a submission identifying them. However, we wanted to correct an error in your release which states “As such, the framework suggests that if the total contribution requirement under the new framework is greater than under the current specified Ontario multi-employer pension plan or defined benefit multi-employer pension plan funding rules, the transitional rules would let the contribution increase be phased in over a three-year period following the transition”. This statement is  simply not true. More stringent funding rules will NOT increase contributions to a target benefit multi-employer benefit plan, they are funded from collective agreement contributions (the money of the worker and not from top by the employer). The impact of more stringent funding rules is a reduction in benefits. It is this wrongminded view of these plans that have historically led to inappropriate funding requirements, including the current proposal to include an excessive provision for adverse deviation. At best, these provisions just create a cushion of funds that can’t be used for benefits but provide comfort for regulators,

Respectfully,

Bob Blakely
President
Multi-Employer Benefit Plans Council of Canada

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