Ontario Regulation 520/20 (the “Amending Regulation”) which amends Regulation 909 under the Pension Benefits Act (Ontario) (the “PBA”) came into force. The Amending Regulation provides temporary relief from pension funding obligations to employers of certain Ontario-registered defined benefit plans in two respects, as discussed below.

Extension to make Catch-up Contributions

The Amending Regulation provides employers of Ontario-registered defined benefit plans with a temporary extension of time to make contributions that are due under a valuation report (“Catch-up Contributions”) that is filed or submitted to the Financial Services Regulatory Authority of Ontario (“FSRA”).

In the normal course, employers are required to remit such Catch-up Contributions to the pension fund within 60 days after the valuation report is filed or submitted. The Amending Regulation provides that where a valuation report is filed or submitted during the period from September 22, 2020 to April 1, 2021, the employer has 120 days following the filing or submission of the report to remit the required catch-up contributions to the pension fund.

Election to defer contributions

The Amending Regulation also permits an eligible employer to make an election to defer one or more required monthly payments to a pension fund in respect of the 6-month period from October 1, 2020 to March 31, 2021 (a “Funding Relief Election”).

Eligibility for Funding Relief Election

In order to make a Funding Relief Election, an employer must satisfy three eligibility requirements. First, only employers of certain Ontario-registered defined benefit pension plans are eligible to make a Funding Relief Election.[1] Second, in order to make a Funding Relief Election, an employer must have made all contributions that were required to be made before the day the Funding Relief Election is filed, based on filed actuarial reports. Third, prior to making a Funding Relief Election, an employer must not have engaged in certain activities or transactions on or after September 21, 2020 (the “Restricted Activities”) unless the employer had a contractual obligation under an agreement that was executed before September 21, 2020 to engage in the Restricted Activities before the Funding Relief Election is made. The Restricted Activities include:

• the declaration or payment of any amount as a dividend or a return of capital on issued or outstanding shares of the employer,
• the purchase or redemption of any issued and outstanding share capital of the employer,
• the payment of bonuses to any executives of the employer,

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