As of July 1, 2012, a number of amendments to the Ontario Pension Benefits Act (PBA) and related amendments to the general regulation under the PBA were proclaimed in force. Employers and plan administrators should carefully review their plans and their administrative practices to ensure that they continue to be compliant with the PBA, and… Continue Reading
Category Archives: Plan Wind-Ups
Subscribe to Plan Wind-Ups RSS FeedPension Plan Restructuring (Part II) – Defined Benefit Plan Wind Up
Posted in Canada Pensions & Benefits Law, Plan Wind-UpsIn an earlier post, I provided an overview of the different ways that some plan sponsors are looking to exit the defined benefit (DB) world. In this post I consider the most drastic and complete way to “restructure” a DB plan – through a pension plan wind up. There are pros and cons to a… Continue Reading
Osler Makes Submission on Draft Pension Regulations
Posted in Canada Pensions & Benefits Law, Plan Wind-UpsOsler made a submission to the Ontario Ministry of Finance in response to its draft regulations regarding grow-in benefits and the Superintendent’s authority to order a pension plan wind up. We understand that the draft regulations were intended to address the following issues: specific circumstances in which an employer-initiated termination of employment would, and would… Continue Reading
Ontario Releases Long-Awaited Draft Pension Regulations
Posted in Canada Pensions & Benefits Law, Legislation & Regulations, Pension Reform, Plan Wind-Ups, Public Sector Plans, SurplusAlmost two years after passing its initial amendments to the Ontario Pension Benefits Act (the PBA) in Bill 236 and Bill 120, the Ontario government has released the first round of regulations required to implement its pension reform agenda. The regulations, which are in draft form and subject to public consultation, address a number of… Continue Reading
Pension Plan Restructuring (Part I)
Posted in Canada Pensions & Benefits Law, DB Plan Funding, Plan Conversions, Plan Wind-UpsThese days, many plan sponsors are looking to exit the defined benefit (DB) world – largely for the following reasons: they want to cut benefit funding and administration costs, as market volatility and low interest rates drive up solvency deficits and make planning more difficult; to achieve better planning and budgeting by making pension liabilities… Continue Reading
Member Entitled to Deferred Pension Notwithstanding Earlier Payment of Small Pension
Posted in Canada Pensions & Benefits Law, Plan Wind-UpsShortly (eight days) after a series of transactions under which Imasco Inc.’s Shoppers Drug Mart business was transferred to Shoppers Drug Mart Inc. (Shoppers) and then sold (share sale) to institutional investors, Mr. Boys’ employment with Shoppers was terminated. As part of the transactions, Boys’ retained his accrued seventeen year pension under the Imasco pension… Continue Reading
Arbitrator Orders Unlocateable Plan Member Rights Preserved on Plan Wind Up
Posted in Canada Pensions & Benefits Law, Pension Reform, Plan Wind-UpsToronto Dress & Sportswear Manufacturers’ Guild Inc. v. Unite Here Ontario Council, [2010] CanLII 56592 (Ont. Arb.) When the Toronto Dress and Sportswear Industry Retirement Fund was wound up in April of 1996, the plan was severely underfunded. Plan assets were only sufficient to fund about 41% of plan liabilities. As the wind up proceeded,… Continue Reading
New FSCO Policy on Distribution of Partial Wind Up Benefits Remaining in Plan and not Annuitized
Posted in Canada Pensions & Benefits Law, Plan Wind-Ups, Regulator Policies & CommunicationsOn December 2, 2009, the Ontario Financial Services Tribunal released its decision in Imperial Oil which held that pension administrators are not required to purchase annuities in respect of partial wind up benefits remaining in the plan following member portability elections. On June 30, 2010, FSCO posted a new policy (effective March 10, 2010) confirming… Continue Reading
New Surplus Sharing Regime In Force In Ontario
Posted in Canada Pensions & Benefits Law, Legislation & Regulations, Pension Reform, Plan Wind-Ups, SurplusAs indicated in a previous post, most of the provisions of Bill 236, Pension Benefits Amendment Act, 2010, which recently received Royal Assent, have not yet come into force, but there is one important exception – the new surplus withdrawal regime for full and partial wind ups. Under the old plan wind up surplus withdrawal rules, an employer had to… Continue Reading
Bill 236 – First Stage of Ontario Pension Reform – Receives Royal Assent
Posted in Canada Pensions & Benefits Law, Legislation & Regulations, Pension Reform, Plan Administration, Plan Wind-Ups, SurplusBill 236, Pension Benefits Amendment Act, 2010, received royal assent on May 18, 2010. As discussed in previous posts (from April 21, 2010 and December 10, 2009) Bill 236 makes a number of significant changes to the Ontario Pension Benefits Act, including: eliminating partial wind-ups; introducing immediate vesting; extending “Rule of 55” grow-in benefits to… Continue Reading
Ontario’s Bill 236 Pension Reforms Revised by Standing Committee
Posted in Canada Pensions & Benefits Law, Legislation & Regulations, Pension Reform, Plan Administration, Plan Wind-Ups, SurplusFollowing several days of public hearings and receipt of many written submissions, on April 19, 2010 the Standing Committee on Finance and Economic Affairs reported on Ontario Bill 236, Pension Benefits Amendment Act, 2010, making a number of amendments to the Bill. Probably the most significant change in the revised version of the Bill, which… Continue Reading
Court Orders Rectification of Plan Text – Allowing Plan Sponsor Relief from Unexpected Liability
Posted in Canada Pensions & Benefits Law, Plan Administration, Plan Wind-UpsA recent decision of the Ontario Superior Court of Justice has confirmed that, in the right circumstances, a plan sponsor can remedy incorrect pension plan language by utilizing the equitable remedy of rectification. In MTD Products Limited v. Baldin, the employer had decided to provide an unreduced early retirement benefit for one long-time employee –… Continue Reading
Federal Government Introduces Pension Reform Amendments
Posted in Bankruptcy, Canada Pensions & Benefits Law, DB Plan Funding, DC Plans, Pension Reform, Plan Wind-UpsWith the introduction of Bill C-9 – this year’s budget bill – on March 29th, the federal government is beginning to move forward on a number of the pension reforms that it had announced last fall. For instance, Bill C-9 contains the increase to the Income Tax Act pension surplus threshold from 10% to 25%… Continue Reading
Ontario Court of Appeal Confirms Court Cannot Order Employer to Wind-up Pension Plan – Lomas v. Rio Algom Limited
Posted in Plan Wind-UpsIn allowing Rio Algom’s appeal of a 2008 Ontario Divisional Court decision, the Ontario Court of Appeal has laid to rest the question of whether a pension plan sponsor can be ordered by a court to wind up its pension plan. The Court of Appeal stated that “it is plain and obvious that the court… Continue Reading
FSCO Attempts to Address Delays in Processing DB Plan Applications, but Legislative Reform Also Required
Posted in Canada Pensions & Benefits Law, Pension Reform, Plan Wind-Ups, Regulator Policies & Communications, SurplusIn January 2010, the Financial Services Commission of Ontario (FSCO) released a consultation paper outlining proposals to streamline the regulatory review process for defined benefit (DB) applications (PDF). The proposals outlined in the most recent paper – an earlier consultation process had taken place in the spring of 2009 – are designed to lead to more… Continue Reading
Hydro One Decision: What are the Implications for Plan Wind-Ups in Light of Pending Pension Reform?
Posted in Canada Pensions & Benefits Law, Legislation & Regulations, Pension Reform, Plan Wind-Ups, SurplusThe Ontario Court of Appeal’s recent decision in Hydro One confirmed that the Superintendent may use a “subset analysis” when assessing the “significance” of plan member terminations for purposes of ordering a partial plan wind-up. The impact of this decision may be limited, however, if the amendments to the Ontario Pension Benefits Act (PBA) wind-up… Continue Reading
Ontario Announces First Stage of Pension Reform
Posted in Canada Pensions & Benefits Law, Legislation & Regulations, Pension Reform, Plan Administration, Plan Wind-Ups, SurplusOn December 9, 2009 the Ontario government announced the first stage of a multi-step process to reform the province’s occupational pension system – the Pension Benefits Amendment Act, 2009 (Bill 236). The next stage is scheduled to be released in the spring of 2010. It appears that the government is taking its cue from the… Continue Reading
Le Ministère des Finances du Canada Publie Ses Propositions de Réforme des Régimes de Retraite
Posted in Canada Pensions & Benefits Law, DB Plan Funding, DC Plans, Pension Reform, Plan Wind-UpsThe following post is a French translation of Michel Benoit’s October 27, 2009 post "Pension Reform Proposals Released by Finance Canada". Le ministre fédéral des finances Jim Flaherty a publié une série de propositions en vue d’améliorer le cadre législatif et règlementaire des régimes de retraite privés assujettis à la juridiction fédérale. Aucune indication n’a… Continue Reading
Pension Reform Proposals Released By Finance Canada
Posted in Canada Pensions & Benefits Law, DB Plan Funding, DC Plans, Pension Reform, Plan Wind-UpsFinance Canada Minister Jim Flaherty released a series of proposals designed to improve the legislative and regulatory framework for federally regulated pension plans. No indication was given as to the timing of the amendments to the Pension Benefits Standards Act, 1985 (PBSA) and the Pension Benefits Standards Regulations, 1985 (PBSA Regulations) that will be required to… Continue Reading
Buschau v. Rogers Communications – The Never Ending Saga Favours Employers…For Now
Posted in Canada Pensions & Benefits Law, Plan Wind-Ups, SurplusIs it permissible to re-open a closed pension plan and thereby quash the hopes of members to access the surplus bottled up in it? The latest decision in the Rogers v. Buschau saga suggests it is. As some may remember, the sponsor, Rogers Communications Inc., had closed a defined benefit pension plan, registered under the federal… Continue Reading
Surplus for Missing Members Can Be Paid into Court
Posted in Canada Pensions & Benefits Law, Plan Wind-Ups, SurplusThe decision of the Ontario Superior Court of Justice in Re Hawker Siddeley Canada Inc. Pension Plan (PDF) presents an opportunity for employers to expedite the surplus distribution process by allowing surplus attributable to unlocated members and former members to be paid into Court. When Hawker Siddeley Canada Inc. wound up its plan in 1996,… Continue Reading
Growing-into Grow-In Benefits?
Posted in Canada Pensions & Benefits Law, Pension Reform, Plan Wind-UpsThe Financial Services Tribunal’s decision in Del Grande et al v. Shoppers Drug Mart Inc. (PDF) has added a further layer of complexity to partial wind-ups by allowing employees to seemingly grow into their grow-in benefits. In this case, the Superintendent of Financial Services ordered the partial wind-up of the Shoppers plan with respect to… Continue Reading