Regulatory Shifts: What’s on the Horizon for Pension Plans?

This is the first in a series of articles from the Association of Canadian Pension Management exploring key trends shaping the future of retirement security.

Retirement security is shaped by evolving regulatory landscapes, and 2025 is already proving to be a pivotal year for pension plan sponsors, administrators, and members. With governments focusing on affordability, workforce retention, and long-term financial security, several policy changes could influence the way pensions are designed, funded, and regulated.

"Regulatory changes are shaping the future of retirement security, and ACPM is committed to ensuring our members’ voices are heard in these discussions. By staying engaged and proactive, we can help shape policies that support sustainable and effective pension systems,” says Chuck Bruce, President, of ACPM Board of Directors.

Here are key developments ACPM is watching and how they could impact your organization:

1. Pension Solvency and Funding Reform

Regulators across Canada continue to adjust funding requirements for defined benefit (DB) pension plans. Ontario’s Permanent Solvency Funding Exemption and similar measures in other provinces have reshaped the way plan sponsors manage long-term liabilities. However, with economic uncertainty and market volatility, policymakers may revisit funding rules to ensure pension sustainability. Expect continued discussions on balancing plan flexibility with financial security for members.

2. Expansion of PRPPs and VRSPs

Pooled Registered Pension Plans (PRPPs) and Voluntary Retirement Savings Plans (VRSPs) have gained traction as solutions for workers without employer-sponsored pensions. Some provinces are exploring enhancements to these models to encourage broader participation, particularly among small- and medium-sized businesses. Employers should stay informed on potential incentives or regulatory adjustments that could make offering these plans more attractive.

3. ESG and Pension Governance

Environmental, Social, and Governance (ESG) factors are playing a greater role in pension plan investment strategies, with regulators increasingly expecting transparency and integration of ESG considerations. The federal government has signalled interest in standardized ESG disclosure requirements, which could mean new compliance obligations for pension fiduciaries. Plan sponsors should be prepared to assess and communicate their ESG approach.

4. Decumulation and Retirement Income Innovations

With Canada’s aging population, policymakers are examining ways to enhance retirement income security beyond the accumulation phase. Expect further discussions on measures such as variable payment life annuities (VPLAs), longevity risk pooling, and flexible drawdown options to help retirees maximize their savings.

5. Federal and Provincial Coordination on Retirement Policy

Intergovernmental collaboration remains key in shaping Canada’s retirement landscape. Issues like CPP/QPP enhancements, pension portability, and harmonization of regulatory frameworks continue to be discussed at both federal and provincial levels. ACPM is actively engaging with policymakers to ensure members’ voices are heard in these discussions.

What This Means for ACPM Members

As governments consider changes that could impact pension plan management and retirement security, staying ahead of policy shifts is critical. ACPM will continue to monitor developments, advocate for industry best practices, and provide insights to help members navigate the evolving regulatory environment.

Want to stay informed? Follow ACPM’s policy updates and advocacy efforts to ensure your organization is prepared for what’s ahead.

ACPM is the leading advocacy organization for plan sponsors and administrators in the pursuit of a balanced, effective and sustainable retirement income system in Canada. We are the voice of retirement plan sponsors, administrators and trustees in the private and public sector and our membership represents retirement income plans that cover millions of plan members.