Ontario Economic Outlook and Fiscal Review 2025: Modernizing Ontario’s Pension Sector
November 11, 2025
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On November 6, 2025, Ontario’s Minister of Finance released the government’s 2025 Fall Economic Outlook and Fiscal Review titled A Plan to Protect Ontario (the “2025 Fall Economic Outlook”). Budget legislation, Bill 68, Plan to Protect Ontario Act (Budget Measures), 2025 (No. 2) (“Bill 68”), was introduced into the legislature on the same day. The 2025 Fall Economic Outlook and Bill 68 included a number of updates relating to the modernization of Ontario’s pension sector, as outlined below.
Jointly Sponsored Pension Plan Conversion Framework
The Ontario government announced in the 2025 Fall Economic Outlook that it is taking measures to modernize and expand the conversion framework governing jointly sponsored pension plans (“JSPPs”) as part of its efforts to enhance the sustainability of workplace pensions and improve efficiency through consolidation. Specifically, the 2025 Fall Economic Outlook noted that amendments to the JSPP conversion framework would enable the conversion of defined contribution (“DC”) plans to a JSPP, including permitting members to use DC balances in their employer’s pre-conversion pension plan to purchase defined benefit (“DB”) credits in the JSPP, and create a pathway for smaller JSPPs to join well-established, larger JSPPs.
Bill 68 contains the amendments to the Pension Benefits Act (Ontario) (“PBA”) to implement the JSPP measures announced in the 2025 Fall Economic Outlook. If passed, Bill 68 will make the following changes to the PBA:
- Section 80.5: A new section 80.5 will be added to the PBA to set out the rules that apply if an employer of a single-employer pension plan (“SEPP”) that provides only DC benefits proposes to convert the plan into a JSPP. This section permits members, former members, retired members, specified beneficiaries, and other persons entitled to benefits under the SEPP to elect not to transfer their DC assets to the JSPP and instead exercise portability rights. Anyone who does not elect to exercise portability rights will be deemed to have consented to the transfer of their DC assets to the JSPP as part of the conversion.
- Section 80.6: A new section 80.6 will also be added to the PBA to set out the rules that apply if an employer of a SEPP that provides both DB and DC benefits proposes to convert the SEPP to a JSPP. This section provides that section 80.5 applies, with necessary modifications, to the proposed conversion of the DC portion of the SEPP.
- Section 81: Section 81 sets out the rules that apply to successor pension plans and currently only applies where a successor pension plan takes the place of another pension plan of the same employer or where a multi-employer pension plan is amended to be a successor to an existing multi-employer pension plan. Section 81 will be amended such that it also applies if a JSPP is established or amended to be a successor to an existing JSPP.
- Section 101.4: A new section 101.4 will be added to the PBA to provide that where an employer of a SEPP that provides DC benefits becomes a participating employer in a JSPP and certain criteria are met, a member of the SEPP may require that the administrator of the SEPP transfer the member’s DC assets to the JSPP. Section 101.4 will also set out the rules that apply to these transfers.
The amendments to the PBA contained in Bill 68 will come into force on a day to be named by order of the Lieutenant Governor in Council.
Pension Benefits Guarantee Fund Review
The Pension Benefits Guarantee Fund (“PBGF”) is subject to review every five years under the PBA. The next PGBF review is due by spring 2026. The 2025 Fall Economic Outlook noted that the upcoming review will focus on the health of the PBGF and its ability to protect pension benefits and pensioners. The results of the review will be outlined in the 2026 Ontario Budget.
Variable Life Benefits
As noted in the 2025 Ontario Budget released earlier this year, the Ontario government was consulting with the pension sector on a variable life benefit (“VLB”) framework. The 2025 Fall Economic Outlook indicates that, informed by feedback from the consultations, the government is developing a VLB framework that would permit VLBs to be offered from pooled registered pension plans, defined contribution pension plans, and pension plans that provide for additional voluntary contributions.
Bill 68 also contains amendments to the Ontario Municipal Employees Retirement System Act, 2006 in relation to governance.
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We will continue to monitor developments as Bill 68 passes through the legislature in the coming weeks. If you have any questions regarding the 2025 Fall Economic Outlook or Bill 68, please do not hesitate to reach out – we’re here to help.
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