Overview and Selected Findings 2006-2009

In July 2000, FSCO implemented a risk-based approach to monitor the funding of defined benefit (DB) pension plans. A required filing called the Actuarial Information Summary (AIS) and a computerized database were developed to support this initiative. The AIS enables FSCO to efficiently collect key actuarial and financial information contained in the funding valuation reports filed under the Pension Benefits Act. FSCO uses this data, for example, to analyze the funded status of DB pension plans and determine trends.

As an extension of its existing monitoring of DB pension plan funding, FSCO implemented a risk-based approach to monitoring DB pension fund investments in 2006. All DB pension plans registered with FSCO, except designated plans, are required to file a standard form called the Investment Information Summary (IIS). This form captures the key data contained in the financial statements related to DB pension funds and the information about plan investment management, which enable FSCO to identify plans with potential investment concerns for further review.

This is FSCO’s sixth annual report on DB pension plan funding, and the first to include information on the funding relief measures implemented in 2007 and 2009 by the Ontario Government. The 2007 measures provide temporary funding relief for Specified Multi-Employer Pension Plans (SOMEPPs) by exempting them from funding on a solvency basis. The 2009 measures provide certain DB pension plans with the following types of funding relief:

• Deferral of special payments for any going concern unfunded liability or solvency deficiency for up to one year;
• Consolidation of previously determined solvency special payments into a new 5-year special payment schedule commencing on the valuation date of the solvency relief report; and
• Extension of the amortization period for a new solvency deficiency up to 10 years, from the current 5 years (with member consent)

This report has been prepared based on filed funding valuation reports with valuation dates between July 1, 2006 and June 30, 2009 and the latest IIS for plan years ending in the period from July 1, 2008 to June 30, 2009.

For further information about this report, please contact:

Mr. George Ma
Chief Actuary, Pension Division
Phone: 416-226-7785
E-mail: George.ma@fsco.gov.on.ca

OR

Mr. Lester Wong
Senior Actuarial Consultant, Pension Division
Phone: 416-226-7784
E-mail: lester.wong@fsco.gov.on.ca

Previous Reports