TORONTO — Ontario is helping workers prepare for their retirement by implementing a permanent framework for target benefits. This framework will help support the sustainability of multi-employer pension plans and pave the way for more employers to offer these plans, helping workers save for their retirement.
Target benefit pension plans provide a monthly stream of income in retirement at a predictable cost for employers. Multi-employer pension plans that provide target benefits are often created by a union or association within a specific industry, especially industries involving the skilled trades. Members of these plans can move from employer to employer while continuing to participate in the same pension plan, which supports job mobility and helps to attract more people into the skilled trades.
“Our government recognizes that retirement savings are crucial to protecting the financial security of workers and retirees, which is why this new permanent target benefits framework is so important,” said Minister Peter Bethlenfalvy. “These plans and their respective members are now supported with clear rules and responsibilities so that workers have a stable retirement with a secure stream of income they deserve.”
Following consultations with the sector, the government has finalized the regulations to establish a permanent target benefit framework, which will come into effect on January 1, 2025. Multi-employer pension plans that wish to convert their benefits to target benefits can apply to the regulator for consent beginning in 2025.
The target benefit framework includes measures to strengthen plan governance, enhance plan communication to members, and improve the management of plan funding. Once pension plans begin operating under the target benefit framework, the government will monitor the new regime to ensure that it is meeting these objectives and needs of workers and retirees with benefits in these plans.
“With this new permanent target benefits framework, our government is ensuring workers and retirees – the Golden Generation of Skilled Tradespeople who built this province into what it is today – receive the financial security and reliability that they have earned. This is part of our government’s plan to attract, retain, and train the province’s workforce who are shaping Ontario’s bright future.” – David Piccini, Minister of Labour, Immigration, Training and Skills Development