The reforms are meant to deal with some of the concerns and shortfalls that have occurred since last fall's stock market crash and economic downturn.

Flaherty says the government is proposing a balanced package of measures to benefit plan sponsors, members and retirees.

Among other things, the amount that plans can be overfunded will increase to 25 per cent from the current 10 per cent.

That's intended to provide a safeguard against the economic disruptions that have recently caused so many plans to become significantly underfunded - sometimes threatening the survival of the sponsoring company.

To protect people who rely on the pension payouts in retirement, companies will be required to pay all the benefits owing if the pension plan is wound up, not just the portion that is paid-up.

Some estimates place the level of underfunding at up to $50 billion.

A government official said more comprehensive reforms will be discussed in mid-December when Flaherty and provincial finance ministers meet in Whitehorse to consider the results of the federal-provincial research group led by MP Ted Menzies.

Other reforms announced include changes to reduced funding volatility, to allow participants to negotiate changes to their pension arrangements and to restrict an employer's ability to take a funding holiday unless plan retains a five-per-cent cushion.

The government said some of the changes will require legislation to be enacted.