The Province is allowing employers to defer contributions to certain defined benefit pension plans to help with the business’ cash flow during the pandemic.
Starting October 1, 2020, employers will be able to delay pension contributions for up to six months. However, all payments that have been deferred must be paid with interest and in accordance with a schedule by March 31, 2022.
Additionally, the Financial Services Regulatory Authority of Ontario will be imposing restrictions on employers that choose to defer contributions to ensure the funds are exclusively used to maintain business operations.
Further, sponsors of defined benefit pension plans will also have twice as long—120 days, instead of 60 days—to make a “catch-up” contribution if a valuation report is filed on or before April 1, 2021.
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These changes are intended to help support the stability and sustainability of Ontario businesses, while also continuing to make pensioners’ retirement funds a priority.