Pension Surplus Rules Have Changed
In December of 2010, changes were made to Ontario pension laws to make it easier for employers to withdraw surplus. Employers no longer have to conduct tedious and expensive historical plan reviews in order to implement a surplus-sharing deal. Rules were also introduced to create a new arbitration process in cases of disputes with pension plan members. Employers are now allowed to receive surplus if:
the employer is entitled to the surplus according to the pension plan documents; there is a written surplus sharing agreement with pension plan members (and possibly other persons); or a court order or arbitration award provides for the payment. Additional changes to the surplus withdrawal rules were recently released and came into force on July 1, 2012. The recent pension reforms further simplify the surplus withdrawal rules by removing the requirements that employers provide information relating to surplus attribution and contractual authority in the written surplus notice to the plan members. In addition, the recent changes make it clear that if an employer is funding a wind-up deficiency and has contributed to the plan more than the amount required to fund the deficiency, the remaining assets in the plan may be refunded to the employer as an overpayment, rather than be treated as...
To continue readingFREE SIGN UP