The Ontario government will implement a permanent framework for target benefit pension plans starting Jan. 1, 2025, aiming to enhance retirement security for workers and support the sustainability of multi-employer pension plans.
The new framework, developed after consultations with the sector, is designed to strengthen plan governance, improve communication to members, and enhance the management of plan funding, it said in a press release.
“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 of Finance 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.”
How the plans work
Target benefit pension plans provide a monthly income in retirement at a predictable cost for employers. They are often established as multi-employer pension plans created by unions or associations within specific industries, particularly in the skilled trades. Members can move between employers while remaining in the same pension plan, supporting job mobility and attracting more people into skilled trades.
“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,” said David Piccini, Minister of Labour, Immigration, Training and Skills Development. “This is part of our government’s plan to attract, retain, and train the province’s workforce who are shaping Ontario’s bright future.”
Framework welcomed
Industry stakeholders have welcomed the new framework. “For many years, LiUNA has advocated for permanent and appropriate regulations for multi-employer pension plans to provide our members with secure pensions in their retirement,” said Joseph Mancinelli, Chair of the Board of Trustees of the LiUNA Pension Fund of Central and Eastern Canada. “On behalf of our members, we commend Premier Doug Ford, Minister Bethlenfalvy and the Ministry of Finance for collaborating with the sector to bring long overdue reform.”
The Multi-Employer Benefit Plan Council of Canada (MEBCO) also expressed support. “Our membership has been waiting seventeen years for the government of Ontario to meaningfully consult with the multi-employer pension sector and develop a permanent framework for target benefits pension plans,” said Alex D. McKinnon, President of MEBCO. “MEBCO is pleased to see the government’s continued support on this file and their continued commitment to engage with us to help workers prepare for their retirement.”
Nearly 70 multi-employer plans in Ontario
Currently, there are 68 multi-employer pension plans in Ontario, many established for workers in the skilled trades, with over one million participants and nearly $48 billion in assets. Multi-employer pension plans wishing to convert their benefits to target benefits can apply to the regulator for consent beginning in 2025. The government will monitor the new regime to ensure it meets the objectives and needs of workers and retirees.
In 2023, 1.3 million people worked in skilled trades-related occupations in Ontario. Over the next decade, the province is expected to need over 500,000 more workers in these fields.
The implementation of the permanent target benefit framework is part of the government’s efforts to enhance retirement security and support workforce development in the province.
