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Bill 34, MPP Pension and Compensation Act, 2025

Bethlenfalvy, Hon. Peter Minister of Finance

Current status:

Royal Assent received. Statutes of Ontario 2025,

chapter 2

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Bill 34 Royal Assent (PDF)

EXPLANATORY

NOTE

This Explanatory Note was written as a reader’s

aid to Bill 34 and does not form part of the law.

Bill 34 has been enacted as

Chapter 2 of the Statutes of Ontario, 2025.

Subsection

61 (1.2) of the Legislative Assembly Act , which

limits the annual salary of members of the Assembly to the salary that was in

effect on March 26, 2009, is repealed. Subsection 62 (1) of that Act is

amended to provide for an increase in salary for the Government House Leader.

Amendments

to the MPP Pensions Act, 1996 include amendments to

provide for the following:

1. The

members of the pension plan continued under subsection 2 (1) of the Act cease

to be members. (See

section 3.1 and the repeal of subsection 4 (1)).

2. Members

of the Assembly are members of the Public Service Pension Plan continued under

the Public Service Pension Act . There are special

benefit vesting rules for members of the 44th Parliament. (See

section 53).

3. The

Lieutenant Governor in Council may, by order, establish an MPP supplemental

pension plan for members of the Assembly. (See subsection 54 (1)).

4. When

it is first established, an MPP supplemental pension plan shall include terms

that are substantially the same as the terms set out in

Schedule 1 which deal

with certain aspects of the plan, including vesting of benefits, eligibility to

receive a pension and the amount of the pension. (See subsection 54 (2) and

Schedule 1).

5. After

it is first established, changes to an MPP supplemental pension plan that would

change benefits or the contribution rates of members of the plan may only be

made with the consent of the Board of Internal Economy. (See

section 55).

6. The

Lieutenant Governor in Council may, by order, provide for allowances to be paid

to a member or former member of the Assembly who is or was not eligible to be a

member of the Public Service Pension Plan or an MPP supplemental pension plan. (See

section 57).

7. Transition

rules are provided for the registered plan accounts of individuals who cease to

be members of the pension plan continued under subsection 2 (1) of the Act. (See

section 58).

Bill 34 2025

Act to amend various Acts with respect to pensions and compensation for members

of the Assembly

His

Majesty, by and with the advice and consent of the Legislative Assembly of the

Province of Ontario, enacts as follows:

Legislative

Assembly Act

Subsection 61 (1.2) of the Legislative Assembly Act

is repealed.

Subsection 62 (1) of the Act is amended by adding the following paragraph:

9.1. Government

House Leader, 19.2 per cent.

Section 63 of the Act is amended by adding the following subsection:

Exception

(3) Subsection

(1) does not apply with respect to a pension a member receives under a

supplemental pension plan established under

section 54 of the MPPs Pension Act, 1996 .

MPPs

Pension Act, 1996

(1) Subsection 1 (2) of the MPPs Pension Act,

1996 is amended by striking out “For the purposes of the Act” at the

beginning and substituting “For the purposes of this Act, other than

Part XI or

Schedule 1”.

(2) Section

1 of the Act is amended by adding the following subsection:

Deemed

members

(5.1) For

the purposes of this Act, other than

Part XI or

Schedule 1, the Information and

Privacy Commissioner and the Ombudsman shall be deemed to be members of the

Assembly.

The Act is amended by adding the following section:

Termination

of membership

3.1 Every member of the

plan ceases to be a member of the plan.

Subsections 4 (1) and (2) of the Act are repealed.

Section 46 of the Act is amended by adding the following subsection:

Limitation

(2) This

section does not apply to a deadline under

Part XI or a supplemental pension

plan established by order under

section 54.

Sections 52 and 53 of the Act are repealed and the following substituted:

PART XI

PUBLIC SERVICE PENSION PLAN PARTICIPATION, MPP SUPPLEMENTAL PENSION PLAN, OTHER

MATTERS

Interpretation

(1) In

this Part and

Schedule 1,

“MPP

supplemental pension plan” means a supplemental pension plan established by

order under

section 54; (“régime de retraite complémentaire des députés”)

“Public

Service Pension Plan” means the pension plan continued under the Public Service Pension Act . (“Régime de retraite des

fonctionnaires”)

Same

(2) For

the purposes of this Part,

Schedule 1, the Public Service Pension Plan and any

applicable supplemental pension plan established under the Public Service Pension Act ,

(

a) the

employer of a member of the Assembly is the Assembly;

(

b) the

period of service of a member of the Assembly shall be determined in accordance

with subsection 61 (2) of the Legislative Assembly Act ;

and

(

c) the

salary of a member of the Assembly is the amount paid to them under the Legislative Assembly Act , other than an amount paid to

reimburse them for expenses actually incurred, and the salary, if any, paid to them

under the Executive Council Act .

MPP

participation in Public Service Pension Plan

(1) Members

of the Assembly are members of the Public Service Pension Plan.

Vesting

of benefits for members of the 44th Parliament

(2) For

an individual who is a member of the Assembly during the 44th Parliament,

benefits under the Public Service Pension Plan in respect of service as a

member of the Assembly shall vest, despite the Pension

Benefits Act ,

(

a) on

the day the 44th Parliament is dissolved, if the individual is still a member

of the Assembly on that day; or

(

b) on

the day the individual dies, if the individual dies before the 44th Parliament

is dissolved and, on the day the individual dies, the individual is still a member

of the Assembly.

Supplemental

pension plan

(1) The

Lieutenant Governor in Council may, by order, establish a supplemental pension

plan for members of the Public Service Pension Plan who are members of the

Assembly.

Initial

terms

(2) A supplemental pension plan,

when it is first established under subsection (1), shall include terms that are

substantially similar to the terms set out in

Schedule 1.

Clarification

(3) For

greater certainty, a member of the Assembly may be a member of both a supplemental

pension plan established under subsection (1) and a supplemental pension plan

established under the Public Service Pension Act .

Administrator

(4) The

Lieutenant Governor in Council may, by order, specify who the administrator of

a supplemental pension plan established under subsection (1) will be.

Legislation

Act, 2006 ,

Part III

(5) Part

III (Regulations) of the Legislation Act, 2006 does

not apply with respect to an order under subsection (1) or (4).

Consent

required for certain changes

(1) An

order under

section 54 that, after an MPP supplemental pension plan is

established, would change the pension benefits, ancillary benefits or

contribution rates of members of the MPP supplemental pension plan may be made

only with the consent of the Board of Internal Economy described in

section 87

of the Legislative Assembly Act .

Exception

(2) Subsection

(1) does not apply to any order or part of an order that is required under the Income Tax Act (Canada), or otherwise by law, to be made.

Consolidated

Revenue Fund

All amounts

required, under the Public Service Pension Plan, any applicable supplemental

pension plan established under the Public Service Pension

Act or an MPP supplemental pension plan, to be paid by the employer in

respect of a member of the Assembly are a charge on and payable from the

Consolidated Revenue Fund.

Allowances

(1) The

Lieutenant Governor in Council may, by order, provide for an allowance to be

paid to a member of the Assembly who,

(

a) is

not eligible to be a member of the Public Service Pension Plan; or

(

b) is

not eligible to be a member of an MPP supplemental pension plan.

Same

(2) The

Lieutenant Governor in Council may, by order, provide for an allowance to be

paid to an individual who is not a member of the Assembly but who,

(

a) was

a member of the Assembly on or after January 1, 2026 ; and

(

b) while

a member of the Assembly on or after January 1, 2026,

(

i) was

not eligible to be a member of the Public Service Pension Plan, or

(ii) was

not eligible to be a member of an MPP supplemental pension plan.

Consolidated

Revenue Fund

(3) Allowances

paid under an order under this

section are a charge on and payable from the

Consolidated Revenue Fund.

Legislative

Assembly Act

(4) Allowances

paid under an order under this

section are not part of a member’s salary for

the purposes of

section 61 of the Legislative Assembly Act .

Public

Sector Salary Disclosure Act, 1996

(5) Despite

the definition of “salary” in subsection 2 (1) of the Public

Sector Salary Disclosure Act, 1996 , amounts paid under an order under this

section are not part of a member’s salary for the purposes of that Act.

Legislation

Act, 2006 ,

Part III

(6) Part

III (Regulations) of the Legislation Act, 2006 does

not apply with respect to an order under this section.

Transition

— registered plan account on ceasing membership

(1) This

section applies with respect to the balance in the registered plan account of an

individual who ceases to be a member of the plan under

section 3.1.

Options

(2) The

individual may choose one or more of the following options for using the

balance:

1. The

individual may receive a pension purchased using all or part of the balance

under

section 27.

2. The

individual may require all or part of the balance to be transferred to a

locked-in retirement account or a life income fund under

section 28.

3. The

individual may require all or part of the balance to be transferred to another

pension plan registered under the Income Tax Act

(Canada), provided the administrator of that pension plan agrees to the

transfer, in which case

section 28 applies to the transfer, with necessary

modifications.

4. The

individual may require all or part of the balance to be transferred to the

Public Service Pension Fund continued under the Public

Service Pension Act for the purpose of purchasing credit for prior

service as a member of the Assembly in the Public Service Pension Plan in

accordance with the terms of that Plan.

Deemed

option if no choice made

(3) If

the individual does not choose an option under subsection (2), or does choose

an option but some of the balance in the individual’s registered plan account remains,

the individual is deemed to have chosen to use the balance, or the remaining

balance, under paragraph 1 of subsection (2).

Statement

of balance and options

(4) On

or before February 1, 2026, the Speaker shall give each individual a statement

setting out the balance in the individual’s registered plan account and describing

the individual’s options under subsection (2).

Same,

timing

(5) For

the purposes of subsection (2), the deadlines in subsections 27 (4) and 28

(4) do not apply, and instead the deadlines shall be the ones specified by

regulation.

Regulations

(1) The

Lieutenant Governor in Council may make regulations respecting anything

necessary or advisable for the purpose of implementing this Part, except as

provided for under subsection (2).

Regulations

relating to s. 58 (5)

(2) The

Minister of Finance may make regulations for the purposes of subsection 58 (5).

The Act is amended by adding the following Schedule:

SCHEDULE

INITIAL TERMS FOR MPP SUPPLEMENTAL PENSION PLAN

Vesting

of benefits

Benefits shall vest,

(

a) for

an individual who is a member of the Assembly during the 44th Parliament,

(

i) on

the day the 44th Parliament is dissolved, if the individual is still a member

of the Assembly on that day and, on that day, the individual has at least six years of service as a member of the Assembly ,

(ii) on

the day the individual dies, if the individual dies before the 44th Parliament

is dissolved and, on the day the individual dies, the individual is still a

member of the Assembly and has at least six years of service as a member of the

Assembly; and

(

b) for

an individual who is a member of the Assembly during a Parliament after the

44th Parliament but for whom subclause (a) (

i) does not apply, on the day the individual

has at least six years of service in the MPP supplemental pension plan.

Eligibility

for pension

To be eligible to receive a pension, an individual must be at least 55 years

old and must have benefits in the MPP supplemental pension plan that have

vested.

Salary

average used for accrual of benefits

The benefit accrual rate shall be applied to the highest average annual salary

over 36 consecutive months of service in the MPP supplemental pension plan.

Amount

of pension

The annual amount of the pension payable to an individual shall be 3 per cent

of the individual’s average annual salary multiplied by the individual’s years

of service in the MPP supplemental pension plan, to a maximum of 35 years of

service, subject to any reductions or adjustments under other sections of this

Schedule.

Reduction

at age 65

The annual amount of an individual’s pension shall be reduced, when the

individual reaches the age of 65 years or if the individual is already 65 years

old or older when they begin to receive the pension, by the product of,

(a) 0.7

per cent of the lesser of,

(

i) the

individual’s average annual salary, and

(ii) the

individual’s average year’s maximum pensionable earnings; and

(

b) the individual’s years

of service in the MPP supplemental pension plan, to a maximum of 35 years of

service.

Reduction

if begin to receive pension before age 65

If an individual is less than 65 years old when they begin to receive their

pension, the pension shall be reduced by 2 per cent for each year between when

they begin to receive their pension and when the individual reaches the age of

65 years.

Inflation

adjustment

An individual’s pension shall be adjusted for inflation in the same manner and

at the same time as pensions payable under the Public Service Pension Plan.

Reduction

for amounts payable under other plans

The pension payable under the MPP supplemental pension plan to an individual

shall be reduced by any amount payable to the individual under the Public

Service Pension Plan and any applicable supplemental pension plan established under

the Public Service Pension Act in respect of the

same period for which benefits accrued under the MPP supplemental pension plan.

Reduction

while receiving an MPP salary

The pension paid to an individual while they are receiving a salary as a member

of the Legislative Assembly shall be reduced in accordance with the terms of

the MPP supplemental pension plan, unless the terms of the MPP supplemental

pension plan provide otherwise.

Member

contributions not required

A member of the MPP supplemental pension plan is not required to contribute to

that plan.

Definitions

In this Schedule,

“average

annual salary” means the highest average salary referred to in

section 3 of

this Schedule; (“traitement annuel moyen”)

“average

year’s

maximum pensionable earnings”, with respect to a member, means the average of

the year’s maximum pensionable earnings under the Canada Pension Plan for the

year in which the member ceases to be a member of the MPP supplemental pension plan

and for each of the two preceding years. (“moyenne des maximums des

gains annuels ouvrant droit à pension”)

Commencement

and

Short Title

Commencement

(1) Except as otherwise provided in this section, this Act comes

into force on January 1, 2026.

(2) Sections

1 and 2 are deemed to have come into force on February 27, 2025.

Short

title

The

short title of this Act is the MPP Pension and

Compensation Act, 2025 .

Date Bill stage Event Outcome Committee

May 29, 2025

Royal Assent

Royal Assent received

May 29, 2025

Third Reading

Vote

Carried

May 29, 2025

Third Reading

Question put

May 29, 2025

Second Reading

Ordered for Third Reading pursuant to the Order of the House

May 29, 2025

Second Reading

Vote

Carried

May 29, 2025

Second Reading

Question put

May 29, 2025

First Reading

Motion to arrange proceedings

May 29, 2025

First Reading

Ordered for Second Reading

May 29, 2025

First Reading

Vote

Carried

First Reading

May 29, 2025

Carried

Ordered for Second Reading

Second Reading

May 29, 2025

Question put

Carried

Ordered for Third Reading pursuant to the Order of the House

Third Reading

May 29, 2025

Question put

Carried

Royal Assent

May 29, 2025

Royal Assent received