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Ontario’s latest budget bill quietly rewrote parts of the Pension Benefits Act in a way that will matter to a lot of employers and members – especially in sectors where Defined Contribution (“DC”) Pension Plan are a major presence. The law has passed, but the new framework is not yet in effect; we’re waiting on Regulations and a proclaimed effective date.

Once those Regulations arrive, the rules will reshape how single-employer DC plans can move into a Jointly Sponsored Pension Plan (“JSPP”). And for the first time, they introduce a route for employers joining a JSPP on a go‑forward basis to let individual members transfer past DC balances if they want to.  These DC balances will be converted to a defined benefit (“DB”) pension by the JSPP.  Of note, these new rules will also apply to the DC portions of ‘combo’ plans, which have separate DC and DB components within the same plan – not to be confused with the much rarer ‘hybrid’ plans which have elements of DB and DC in the same component.

Permitting DC plans to join a JSPP marks a significant change. In many ways, it’s good news. But like anything touching pensions, the devil will be in the details – and those details aren’t written yet.

Let’s break it down.

1. When a DC Plan Merges into a JSPP

If an employer wants to merge its DC plan into a JSPP, the new framework sets out how that will work once the Regulations are in place.

Members get to choose whether their DC account is transferred. That’s fundamentally positive: more flexibility, more individual control, and fewer situations where people are pushed into an arrangement they didn’t sign up for.

But the legislation also includes deemed consent if a member doesn’t respond within the prescribed window. That’s efficient – conversions can’t drag on forever – but it does introduce real risk for anyone who isn’t paying attention. A member who is inattentive could wake up one day and find that their DC balance has been converted into a DB entitlement based on a formula they didn’t review.

In most cases, this will probably work out fine. Still, I’ve been around long enough to know that a handful of members won’t engage, won’t read, won’t ask questions, and might later wish they had. That’s where the Regulations need to serve as guardrails – ensuring communication is clear, persistent, and genuinely understandable.

2. When a DB+DC Combination Plan Merges into a JSPP

Combination plans have been in an awkward spot for years when it comes to JSPP mergers. These amendments finally give them a clear pathway to exit the sponsorship of their single-employer pension plan.

The DC side follows the same choice‑and‑portability structure described above. The DB side uses the existing JSPP conversion framework.

From a policy perspective, this is a welcome modernization. Many university‑sector plans fall into this category, and these changes make it far more realistic for employers with DC or DB+DC structures to consider joining a large established JSPP. That’s why I’d call this “quiet good news” for employers with the potential to join the University Pension Plan and really any employer sponsoring a DC pension plan – it removes many of the technical and logistical barriers that made these decisions harder than they needed to be.

But again, the big unanswered question is conversion fairness. Turning DC dollars into DB lifetime income isn’t a simple equation. If the Regulations push the conversion factors too high, it will shift cost to the existing JSPP membership. If they’re too low, DC members will get poor value and will opt out en masse. Neither outcome is desirable, and the right answer sits somewhere in the middle.

3. When an Employer with a DC Plan Joins a JSPP for Future Service Only

This is the sleeper change that may have the biggest long‑term effect.

Under the new framework, an employer can join a JSPP for future service only – so the employer stops offering new DC accruals – but members can then individually decide to transfer their existing DC balances into the JSPP, if the employer and JSPP agree to allow individual transfers.

This strikes me as truly valuable flexibility:

• It allows employers to move into the stability of a JSPP without running a full plan merger.
• It gives employees optionality instead of forcing a one‑size‑fits‑all outcome.
• It opens the door for JSPPs to grow in sectors where full plan mergers were never practical.

Again, though: the conversion factors matter. A fair deal encourages participation. An unfair deal kills it.  Plus, will employers want to continue sponsoring a closed and frozen DC pension plan – although perhaps this works when only one group within the plan joins the JSPP and other groups continue within the DC plan.

So… Good News or Bad News?

On balance, I’d say: mostly good news.

For employers, this is increased flexibility and a more predictable, legislated process. For employees, it offers more choice and, potentially, access to the lifetime income security and strong governance provided by a JSPP. For large JSPPs, particularly in the university space, it finally provides a sensible framework to welcome employers with DC or combo plans.

But there’s a clear risk on the member‑experience side. If people aren’t paying attention during the conversion window, they might get a DB benefit they didn’t realize they were locking into. And the fairness of DC‑to‑DB conversion rules will define whether this framework is truly balanced or ends up favouring one group at the expense of another.

That’s why the Regulations matter so much. They need to be transparent, practical, and designed with both sides of the balance sheet in mind. Too generous or too punitive, and the whole thing becomes either unaffordable or unattractive.

The Bottom Line

Ontario has now put the legislative scaffolding in place for a more flexible, more coherent approach to bringing single-employer DC and combo plans into JSPPs. The framework is enacted, but not yet active – we’re all waiting for the Regulations.

If those Regulations strike the right balance, this could be an important evolution in the province’s pension landscape. If not, well… we’ll be back here writing another blog.