Ontario pension law expanded to allow variable life benefits, new wind-up rules, and extinguishment of untraceable members' benefits

Plain-language summary · AI-assisted · not legal advice

Ontario's Pension Benefits Act has been amended to introduce a new type of pension payment called a "variable life benefit" — a pooled, non-account-based pension paid from a dedicated fund whose amount can fluctuate based on investment returns, mortality experience, and actuarial assumptions. Pension plans may be designed to offer this option, and members with defined contribution or additional voluntary contribution balances may elect to transfer those funds into a variable life benefit fund before retiring. A parallel set of partial wind-up rules (sections 77.0.1–77.0.7) has been added specifically for plans offering variable life benefits, since the general bar on partial wind-ups still applies to other plan types. A new section (102.5) allows plan administrators to apply to the Chief Executive Officer to extinguish the rights of former or retired members who appear to be over 100 years old and cannot be located, with defined consequences for misapplied consents. The Guarantee Fund monthly benefit threshold for wind-ups on or after March 26, 2026 has also been increased from $1,500 to $3,000 per month. Most of the new variable life benefit provisions are not yet in force and require a proclamation order.

Who this affects: pension plan administrators · plan sponsors and employers · retiring and former plan members with defined contribution accounts · multi-employer and single-employer pension plans · plan actuaries and compliance officers