Temporary Solvency Relief
In response to the deficits facing public sector pension plans, the Ontario government introduced two stages of temporary relief to assist employers with the financial impact of pension solvency payments. In 2011, the provincial government approved Laurierís application for stage one temporary solvency relief. This provided exemption from solvency special payments for a period of three years from January 1, 2010 to December 31, 2012. To qualify for Stage 2 relief, Laurier was required to submit a Stage 1 progress report demonstrating that sufficient progress has been made towards making the Plan more sustainable. The Stage 1 report detailed the recent changes to the Plan, including increased employee contributions and changes to post-retirement indexing and early retirement provisions.
We are pleased to announce that Laurier has been approved for Stage 2 pension solvency relief, which allows amortization of solvency special payments associated with the December 31, 2012 actuarial valuation over a period of 10 years instead of 5 years. The regulations also allowed a funding option that provides deferral in filing the next required valuation for 3 years. For Laurier, this will mean a valuation date of December 31, 2015. If we did not elect this option, Laurier would be required to perform another actuarial valuation at December 31, 2013, given that the Plan is less than 85% funded. The 3-year valuation option allows the University time to plan for the increased costs associated with member longevity through prudent financial measures and to explore longer-term sustainability strategies with our employee groups.