Three public sector pension plan agreements reached

Ontario has reached agreements with three public sector pension plans.

Contribution rates will be frozen for five years, except in exceptional circumstances.

Involved are the Healthcare of Ontario Pension Plan, the Ontario Public Service Employees Union Pension Plan and the  Colleges of Applied Arts and Technology Pension Plan.

The agreements will help ensure the plans don't add to employer and taxpayer costs if addressing a new funding shortfall, notes a government news release.

A plan experiencing a new funding shortfall during the five-year period would need to reduce future benefits, up to a limit, before further increasing employer contributions.

Any benefit reductions would apply to future benefits only, not those that have already been accrued.

Current retirees would not be affected.

Pension costs have been one of the fastest-growing line items in the provincial budget.

Most of Ontario’s largest public sector pension plans are jointly sponsored.

Decisions on benefits and contributions are shared between employer sponsors and representatives of plan members.

Plan members make contributions to pay for the benefits they are earning and are responsible for sharing in the cost of funding any deficits.

In most cases, plan members pay for half the cost of their benefits, with the employer matching plan members’ contributions.
 

Tweet