[39] Bill 120 Royal Assent (PDF)
Bill 120 2010
An Act to amend the Pension Benefits Act and the Pension Benefits Amendment Act, 2010
Note: This Act amends the Pension Benefits Act. For the legislative history of the Act, see the Table of Consolidated Public Statutes – Detailed Legislative History at www.e-Laws.gov.on.ca.
Her Majesty, by and with the advice and consent of the Legislative Assembly of the Province of Ontario, enacts as follows:
Pension Benefits Act
1. (1) The definition of "additional voluntary contribution" in subsection 1 (1) of the Pension Benefits Act is repealed and the following substituted:
"additional voluntary contribution" means a contribution to the pension fund by a member of the pension plan beyond any amount that the member is required to contribute, but does not include,
(a) an optional contribution, or
(b) a contribution in relation to which the employer is required to make a concurrent additional contribution to the pension fund; ("cotisation facultative supplémentaire")
(2) The definition of "defined benefit" in subsection 1 (1) of the Act is repealed and the following substituted:
"defined benefit" means a pension benefit other than a defined contribution benefit or a target benefit; ("prestation déterminée")
(3) The definition of "defined contribution benefit" in subsection 1 (1) of the Act is repealed and the following substituted:
"defined contribution benefit" means a pension benefit determined with reference to and provided by contributions paid by or for the credit of a member, and the interest on the contributions, and determined on an individual account basis, but does not include an optional benefit; ("prestation à cotisation determinée")
(4) Subsection 1 (1) of the Act is amended by adding the following definition:
"normal cost" means, with respect to a pension plan, the normal cost as determined in accordance with the regulations; ("coût normal")
(5) Subsection 1 (1) of the Act is amended by adding the following definitions:
"optional benefit" means a benefit that is prescribed for the purposes of subsection 40.1 (1) as an optional benefit; ("prestation optionnelle")
"optional contribution" means a contribution to the pension fund that is made to obtain an optional benefit under the pension plan and that is made by a member of the pension plan beyond any amount that the member is required to make; ("cotisation optionnelle")
(6) The definition of "participating employer" in subsection 1 (1) of the Act is repealed and the following substituted:
"participating employer", in relation to a jointly sponsored pension plan or a multi-employer pension plan, means an employer required to make contributions to the pension fund; ("employeur participant")
(7) Subsection 1 (1) of the Act is amended by adding the following definition:
"solvency liabilities" means, with respect to a pension plan, solvency liabilities as determined in accordance with the regulations; ("passif de solvabilité")
(8) Subsection 1 (1) of the Act is amended by adding the following definition:
"target benefit" means a pension benefit that is a target benefit as determined under section 39.2; ("prestation cible")
(9) Section 1 of the Act is amended by adding the following subsection:
Same, reduced funding obligations
(2.1) A pension plan that is a jointly sponsored pension plan on August 24, 2010 continues to be a jointly sponsored pension plan after that date even if the documents that create and support the plan are amended so that its members are not required to make contributions in respect of any solvency deficiency of the plan.
(10) Clause 1 (4) (a) of the Act is amended by adding "or the Not-for-Profit Corporations Act, 2010" after "Business Corporations Act".
2. (1) Clause 8 (1) (g) of the Act is repealed and the following substituted:
(g) a person appointed as administrator by the Superintendent;
(g.1) the Superintendent; or
(2) Section 8 of the Act is amended by adding the following subsections:
Appointment, etc., by Superintendent
(1.1) The Superintendent may, in prescribed circumstances, appoint an administrator for a pension plan and may terminate the appointment if the Superintendent considers the termination reasonable in the circumstances.
Superintendent as administrator
(1.2) The Superintendent may, in prescribed circumstances, act as administrator of a pension plan.
3. (1) Section 10 of the Act is amended by adding the following subsection:
Same
(2.1) The documents that create and support a multi-employer pension plan shall specify the consequences, if any, of the withdrawal of a participating employer from the pension plan in respect of the funding and payment of pension benefits of a member, a former member or any other person affected by the withdrawal and must satisfy such requirements as may be imposed by this Act and the regulations.
(2) Subsection 10 (2.1) of the Act, as enacted by subsection (1), is amended by striking out "of a member, a former member" and substituting "of a member, a former member, a retired member".
(3) Paragraphs 1 and 2 of subsection 10 (3) of the Act are repealed and the following substituted:
1. The obligation of members to make contributions under the plan. This must include their obligations in respect of any going concern unfunded liability and, except in the case of plans described in subsection 1 (2.1), in respect of any solvency deficiency.
2. The obligation of employers to make contributions under the plan or the obligation of other persons or entities to make the contributions under the plan on behalf of employers. This must include their obligations in respect of any going concern unfunded liability and, except in the case of plans described in subsection 1 (2.1), in respect of any solvency deficiency.
(4) Subsection 10 (3) of the Act is amended by adding the following paragraph:
3. The consequences, if any, of the withdrawal of a participating employer from the plan in respect of the funding and payment of pension benefits of a member, a former member or any other person affected by the withdrawal. The consequences set out in the pension plan must satisfy such requirements as may be imposed by this Act and the regulations.
(5) Paragraph 3 of subsection 10 (3) of the Act, as enacted by subsection (4), is amended by striking out "of a member, a former member" and substituting "of a member, a former member, a retired member".
4. (1) Section 14 of the Act is amended by adding the following subsection:
Same, target benefits
(3.1) Subsection (1) does not apply in respect of a pension plan that provides only target benefits or in respect of that part of a pension plan that provides target benefits.
(2) Subsection 14 (4) of the Act is amended by striking out "80.2 or 81" and substituting "80.2, 80.3 or 81".
5. The Act is amended by adding the following section:
Improvement in benefits
14.0.1 (1) An amendment to a pension plan is void,
(a) if the amendment purports to increase an amount described in clause 14 (1) (a), (b) or (c); and
(b) if the increase would reduce the transfer ratio or the going concern funded ratio of the pension plan, determined in accordance with the regulations, below the prescribed level.
Exceptions
(2) Subsection (1) does not apply if an amendment is required as a result of a judicial decision or in such other circumstances as may be prescribed.
6. Subsection 18 (1) of the Act is amended by adding the following clauses:
(f) refuse to register part of an amendment to a pension plan if the part is void or if the pension plan with that part of the amendment would cease to comply with this Act and the regulations;
(g) revoke the registration of a part of an amendment that does not comply with this Act and the regulations.
7. Subsections 22 (9), (10) and (11) of the Act are repealed and the following substituted:
Benefits of administrator
(9) The administrator of a pension plan is not entitled to any benefit from the pension plan other than pension benefits, ancillary benefits and a refund of contributions.
Benefits of members of pension committee, etc.
(10) Subsection (9) applies, with necessary modifications, to a member of a pension committee or board of trustees that is the administrator of a pension plan and to a member of a board, agency or commission made responsible by an Act for the administration of a pension plan.
8. (1) The Act is amended by adding the following section:
Payment of administrative fees and expenses
22.1 (1) The administrator of a pension plan is entitled to be paid from the pension fund the administrator's reasonable fees and expenses relating to the administration of the pension plan and the administration and investment of the pension fund.
Exception
(2) However, the administrator is not entitled to be paid from the pension fund any fees and expenses relating to the administration of the pension plan or the administration and investment of the pension fund,
(a) if payment to the administrator is prohibited, or payment of the fees and expenses is otherwise provided for, under the documents that create and support the pension plan or the pension fund; or
(b) if payment to the administrator is prohibited, or payment of those fees and expenses is otherwise provided for, under the Act or regulations.
Same, members of pension committee, etc.
(3) Subsections (1) and (2) apply, with necessary modifications, to a member of a pension committee or board of trustees that is the administrator of a pension plan and to a member of a board, agency or commission made responsible by an Act for the administration of a pension plan.
Fees and expenses of agent, etc.
(4) The administrator of a pension plan may pay from the pension fund to an agent of the administrator, to the employer or to any other person who provides services relating to the administration of the pension plan or the administration and investment of the pension fund the reasonable fees and expenses of the agent, employer or other person.
Exception
(5) However, the administrator is not permitted to pay from the pension fund to an agent, employer or other person described in subsection (4) the fees and expenses relating to the administration of the pension plan or the administration and investment of the pension fund,
(a) if payment to the agent, employer or other person is prohibited, or payment of the fees and expenses is otherwise provided for, under the documents that create and support the pension plan or the pension fund; or
(b) if payment to the agent, employer or other person is prohibited, or payment of those fees and expenses is otherwise provided for, under the Act or regulations.
(2) Section 22.1 of the Act, as enacted by subsection (1), is amended by adding the following subsections:
Fees and expenses of appointed administrator
(6) If the Superintendent appoints an administrator under subsection 8 (1.1), the appointed administrator is entitled to be paid, from the pension fund, the appointed administrator's reasonable fees and expenses relating to the administration of the pension plan and the administration and investment of the pension fund.
Expenses of Superintendent
(7) If the Superintendent acts as administrator under subsection 8 (1.2), the Superintendent is entitled to be paid, from the pension fund, his or her reasonable expenses relating to the administration of the pension plan and the administration and investment of the pension fund.
9. Subsection 26 (5) of the Act, as enacted by the Statutes of Ontario, 2010, chapter 9, subsection 15 (2), is amended by striking out "80.2 or 81" at the end and substituting "80.2, 80.3 or 81".
10. (1) Section 39 of the Act is amended by adding the following subsection:
Reduction re target benefits
(4.3) If a former member transfers an amount under subsection 42 (1) in connection with his or her deferred pension under a pension plan that provides target benefits, and if the transferred amount was reduced under subsection 42 (2.1),
(a) the lump sum payment to which the former member is entitled under subsection (4) must be reduced in the prescribed manner; and
(b) subsection (3) does not apply with respect to the reduced lump sum payment.
(2) Subsection 39 (5) of the Act is amended by adding the following paragraph:
1.1 Optional benefits.
11. The Act is amended by adding the following section:
Defined contribution benefits
39.1 A pension plan that provides defined contribution benefits may authorize payment of the pensions or pension benefits to be made in any manner authorized by the Income Tax Act (Canada) and to be made in accordance with such requirements and subject to such restrictions as may be prescribed.
12. (1) The Act is amended by adding the following section:
Target benefits
39.2 (1) The pension benefits provided by a pension plan are target benefits if all of the following criteria are satisfied:
1. The pension benefits are not defined contribution benefits.
2. The obligation of the employer to contribute to the pension fund is limited to a fixed amount set out in one or more collective agreements.
3. The administrator is authorized, by the documents that create and support the pension plan and pension fund, to reduce benefits, deferred pensions or pensions accrued under the plan, both while the plan is ongoing and upon wind up.
4. The reduction referred to in paragraph 3 is not prohibited by the terms of any applicable collective agreement or by the pension legislation of a designated jurisdiction.
5. The pension benefits satisfy such other criteria as may be prescribed.
6. The pension plan satisfies such other criteria as may be prescribed.
Same
(2) Despite subsection (1), the pension benefits provided by a pension plan are not target benefits if the administrator's authority to reduce benefits, deferred pensions or pensions accrued under the plan is restricted in a manner or to an extent that is prohibited by regulation for target benefits.
Same
(3) Ancillary benefits provided by a pension plan that provides target benefits are also target benefits.
Certain multi-jurisdictional pension plans
(4) For a designated multi-jurisdictional pension plan, the pension benefits are target benefits in such circumstances as may be prescribed even though, in a designated jurisdiction, the administrator's authority to reduce benefits, deferred pensions or pensions for members and former members in that jurisdiction is prohibited or restricted under the pension legislation of that jurisdiction.
(2) Subsection 39.2 (4) of the Act, as enacted by subsection (1), is amended by striking out "for members and former members" and substituting "for members, former members and retired members".
13. (1) Section 40 of the Act is amended by adding the following subsection:
Treatment re target benefits
(5) Subsection (2) applies with respect to ancillary benefits under a pension plan that provides target benefits, except in such circumstances as may be prescribed.
(2) Section 40 of the Act is amended by adding the following subsection:
Treatment of optional benefits
(6) Subsection (2) applies with respect to ancillary benefits that are optional benefits, except in such circumstances as may be prescribed.
14. The Act is amended by adding the following section:
Optional benefits
40.1 (1) A pension plan that provides defined benefits may provide as optional benefits such benefits as may be prescribed.
Optional contributions
(2) Optional contributions may be made by a member for optional benefits under the pension plan and, if the pension plan so permits, the member may choose or vary the amount of the optional contributions to be made.
Same
(3) The optional contributions made by a member must be applied, in accordance with the terms of the pension plan, to provide only optional benefits upon the termination of employment or membership.
Requirements re contributions
(4) A pension plan that provides optional benefits must satisfy such requirements as may be prescribed about the manner of determining the amount of the optional contributions for the optional benefits.
Requirements re conversion
(5) The conversion of optional contributions into optional benefits is subject to such requirements as may be prescribed by regulation.
Non-application
(6) Such provisions of the Act and regulations as may be prescribed do not apply with respect to optional benefits and optional contributions.
15. (1) Clause 42 (1) (a) of the Act is repealed and the following substituted:
(a) to the pension fund related to another pension plan, if the conditions set out in subsection (1.1) are satisfied;
(2) Section 42 of the Act is amended by adding the following subsection:
Requirements re transfer to another pension plan
(1.1) The transfer described in clause (1) (a) to the pension fund related to another pension plan is authorized,
(a) if the other pension plan is a pension plan registered under this Act, a pension plan established or governed by a statute in a designated jurisdiction, a pension plan registered in a designated jurisdiction or a pension plan prescribed for the purposes of this section; and
(b) if the administrator of the other pension plan agrees to accept the payment.
(3) Section 42 of the Act is amended by adding the following subsection:
Reduction re target benefits
(2.1) If a pension plan that provides target benefits does not require contributions to be made in respect of any solvency deficiency that relates to the target benefits, the amount that a former member is entitled to require the administrator to pay under subsection (1) that relates to target benefits may be reduced in the prescribed manner and in the prescribed circumstances.
16. Subsection 55 (4) of the Act is repealed and the following substituted:
Same, jointly sponsored pension plans
(4) Members of a jointly sponsored pension plan shall make the contributions required under the plan (including their obligations in respect of any going concern unfunded liability and, except in the case of plans described in subsection 1 (2.1), in respect of any solvency deficiency) in accordance with the prescribed requirements for funding and shall make the contributions in the prescribed manner and at the prescribed times.
17. The Act is amended by adding the following section:
Contribution holidays
55.1 (1) An employer required to make contributions under a pension plan, or a person or entity required to make contributions under a pension plan on behalf of an employer, may reduce or suspend, in the prescribed manner, contributions for the normal cost of the pension plan if the pension plan has a surplus and if such other requirements as may be prescribed are satisfied.
Same
(2) The contributions that members of a pension plan are required to make for the normal cost of the pension plan may be reduced or suspended in the prescribed manner if the pension plan has a surplus and if such other requirements as may be prescribed are satisfied.
Exception
(3) However, contributions cannot be reduced or suspended under this section if the documents that create and support the pension plan or the pension fund prohibit the reduction or suspension.
Conflict
(4) This section prevails over subsections 55 (2), (3) and (4).
18. The Act is amended by adding the following section:
Letters of credit
55.2 (1) This section applies if a prescribed employer is required to make payments into the pension fund with respect to a solvency deficiency.
Use of letter of credit
(2) Instead of making payments into the pension fund with respect to the solvency deficiency, the employer may provide a letter of credit to a prescribed person or entity if the requirements of this section are satisfied.
Requirements
(3) The letter of credit must satisfy such requirements as may be prescribed.
Restrictions
(4) The employer is not entitled to provide a letter of credit if the total amount of all letters of credit provided to the prescribed person or entity for the pension plan would exceed 15 per cent of the solvency liabilities of the pension plan.
Same
(5) For the purposes of subsection (4), the regulations may specify that solvency liabilities must be determined in a manner that may differ from the requirements that otherwise apply.
Distribution
(6) The employer must provide the letter of credit to the prescribed person or entity within such period after it is issued as may be prescribed and the employer must give a copy of the letter of credit to the administrator within the same period.
Notice to the Superintendent
(7) The administrator shall notify the Superintendent in the prescribed manner and within the prescribed period that a letter of credit has been provided and, upon request, the administrator shall give the Superintendent such information about the letter of credit as the Superintendent may specify.
Held in trust
(8) The prescribed person or entity holds the letter of credit in trust for the pension plan.
Demand for payment
(9) In such circumstances as may be prescribed, the prescribed person or entity shall demand payment of the amount of the letter of credit into the pension fund by the issuer of the letter of credit.
Costs of letter of credit
(10) The fees or expenses associated with obtaining, holding, amending or cancelling a letter of credit are not payable from the pension fund. However, subject to section 22.1, the fees and expenses associated with enforcing a letter of credit are payable from the pension fund.
Status of public sector pension plans
(11) This section does not apply with respect to a public sector pension plan unless the regulations specify that it applies to the pension plan.
Exclusion of multi-employer pension plans
(12) This section does not apply with respect to multi-employer pension plans.
Conflict
(13) This section prevails over subsection 55 (2).
19. The Act is amended by adding the following section:
Overpayments, etc., by employer
62.1 (1) This section applies,
(a) if an employer pays an amount in respect of a pension plan that should have been paid out of the pension fund; or
(b) if an employer makes an overpayment into the pension fund.
Prerequisite for reimbursement
(2) The administrator of the pension plan is not permitted to make or authorize a payment from the pension fund to reimburse the employer for a payment described in subsection (1) unless the Superintendent consents in advance to the payment from the pension fund to the employer.
Application for reimbursement
(3) The employer or, in the case of a jointly sponsored pension plan or multi-employer pension plan, the administrator may apply to the Superintendent for consent to the payment from the pension fund to reimburse the employer for a payment described in subsection (1).
Deadline
(4) The application must be made before the later of,
(a) 24 months after the date on which the employer made the payment described in subsection (1); and
(b) six months after the date on which the administrator, acting reasonably, becomes aware of the payment described in subsection (1).
Consent
(5) Subject to section 89, the Superintendent may consent to the payment from the pension fund to the employer if the application is made before the deadline described in subsection (4).
20. (1) Section 63 of the Act is amended by adding the following subsection:
Same, optional contributions
(2.1) Subsection (1) does not prevent the refund of an optional contribution and interest thereon to a former member.
(2) Subsection 63 (2.1) of the Act, as enacted by subsection (1), is amended by striking out "to a former member" at the end and substituting "to a former member or retired member".
21. (1) Subsection 68 (2) of the Act is amended by striking out the portion before clause (a) and substituting the following:
Notice
(2) If the employer or the administrator, as the case may be, intends to wind up the pension plan, the administrator shall give written notice of the intended wind up to,
. . . . .
(2) Subsection 68 (2) of the Act, as re-enacted by the Statutes of Ontario, 2010, chapter 9, subsection 49 (4), is amended by striking out the portion before clause (a) and substituting the following:
Notice
(2) If the employer or the administrator, as the case may be, intends to wind up the pension plan, the administrator shall give written notice of the intended wind up to,
. . . . .
(3) Subsection 68 (3) of the Act is repealed and the following substituted:
Partial wind up
(3) If the intended wind up is a partial wind up of the pension plan, the administrator is not required to give written notice to members, former members or other persons entitled to payment from the pension fund if they will not be affected by the partial wind up.
(4) Subsection 68 (3) of the Act, as re-enacted by subsection (3), is amended by striking out "to members, former members" and substituting "to members, former members, retired members".
(5) Subsection 68 (3) of the Act, as re-enacted by subsection (3), is repealed.
(6) Subsection 68 (4) of the Act is repealed and the following substituted:
Contents of notice
(4) The notice of the intended wind up or partial wind up must contain such information as may be prescribed.
(7) Subsection 68 (4) of the Act, as re-enacted by subsection (6), is amended by striking out "The notice of the intended wind up or partial wind up" at the beginning and substituting "The notice of the intended wind up".
(8) Subsection 68 (6) of the Act is amended by adding "Subject to section 89" at the beginning.
22. Section 69 of the Act is amended by adding the following subsection:
Interpretation
(5) A reduction or suspension of contributions under section 55.1 (contribution holidays) does not constitute a cessation or suspension of employer contributions for the purposes of clause (1) (a) or subclause (1) (h) (ii).
23. Subsections 70 (2) and (3) of the Act are repealed and the following substituted:
Restriction on payments
(2) If the administrator has given notice under section 68 or 69 of the intended wind up of the pension plan, no payment shall be made out of the pension fund until the Superintendent has approved the wind up report.
Same
(3) However, subsection (2) does not prevent the continued payment of a pension or other benefit if the payment commenced before the administrator gave notice of the intended wind up and it does not prevent any other payment that is prescribed or that is approved by the Superintendent.
24. Section 71 of the Act is repealed.
25. Section 77.5 of the Act is repealed.
26. (1) The Act is amended by adding the following section after the heading "Surplus":
Entitlement to surplus
77.11 (1) The documents that create and support a pension plan and pension fund govern the entitlement of the employer and other persons to payment of surplus under the pension plan, except as otherwise provided under this Act and subject to the restrictions on payment set out in sections 78 and 79.
If no provision in a pension plan
(2) A pension plan that does not provide for the withdrawal of surplus money while the pension plan continues in existence shall be construed to prohibit the withdrawal of surplus money accrued after December 31, 1986.
Same, on wind up
(3) If a pension plan does not provide for payment of surplus to the employer on the wind up of the pension plan, the pension plan shall be construed to require that surplus accrued after December 31, 1986 shall be distributed proportionately on the wind up of the pension plan among members, former members and other persons entitled to payments under the pension plan on the date of the wind up.
On wind up of successor pension plan
(4) If a pension plan is a successor pension plan and if it is being wound up in whole or in part, the employer is not entitled to payment of surplus under the pension plan unless the documents that created and supported the original pension plan and pension fund and those that create and support the successor pension plan and pension fund both provide for payment of surplus to the employer on the wind up or partial wind up, as the case may be, of the pension plan.
Same
(5) Subsection (4) does not preclude a written agreement described in subsection (7) from providing for payment of surplus to the employer in the circumstances specified in the agreement.
Transition
(6) Subsection (4) does not apply if the effective date of the transfer of assets from the original pension plan to the successor pension plan is earlier than the date on which the Securing Pension Benefits Now and for the Future Act, 2010 received Royal Assent.
Agreement about surplus
(7) A written agreement among the following persons may provide for payment of surplus to the employer in the circumstances specified in the agreement and as of the date specified in the agreement:
1. If the surplus is to be paid to the employer while the pension plan continues in existence,
i. the employer,
ii. at least two-thirds of the members of the pension plan (and, for this purpose, a trade union that represents members may agree on behalf of those members), and
iii. the number which is considered appropriate in the circumstances by the Superintendent of former members and other persons who are entitled to payments under the pension plan as of the specified date for payment of the surplus.
2. If the surplus is to be paid to the employer on the wind up of the pension plan in whole,
i. the employer,
ii. at least two-thirds of the members of the pension plan (and, for this purpose, a trade union that represents or represented members on the date of the wind up may agree on behalf of those members), and
iii. the number which is considered appropriate in the circumstances by the Superintendent of former members and other persons who are entitled to payments under the pension plan as of the date of the wind up.
3. If the surplus is to be paid to the employer on the partial wind up of the pension plan,
i. the employer,
ii. at least two-thirds of the members of the pension plan affected by the partial wind up (and, for this purpose, a trade union that represents or represented affected members on the date of the partial wind up may agree on behalf of those members), and
iii. the number which is considered appropriate in the circumstances by the Superintendent of former members and other persons who are affected by the partial wind up and who are entitled to payments under the pension plan as of the date of the partial wind up.
Effect of agreement
(8) A written agreement prevails over any document that creates and supports the pension plan and pension fund, it prevails over subsections (2), (3) and (4), and it prevails despite any trust that may exist in favour of any person.
(2) Subsection 77.11 (3) of the Act, as enacted by subsection (1), is amended by striking out "among members, former members" and substituting "among members, former members, retired members".
(3) Subsection 77.11 (4) of the Act, as enacted by subsection (1), is amended,
(a) by striking out "if it is being wound up in whole or in part" and substituting "if it is being wound up"; and
(b) by striking out "on the wind up or partial wind up, as the case may be, of the pension plan" at the end and substituting "on the wind up of the pension plan".
(4) Subsection 77.11 (5) of the Act, as enacted by subsection (1), is amended by adding "or an arbitration award made in accordance with section 77.12" after "a written agreement described in subsection (7)".
(5) Subsection 77.11 (7) of the Act, as enacted by subsection (1), is amended,
(a) by striking out "of former members" in subparagraph 1 iii and substituting "of former members, retired members";
(b) by striking out "of former members" in subparagraph 2 iii and substituting "of former members, retired members"; and
(c) by striking out "of former members" in subparagraph 3 iii and substituting "of former members, retired members".
(6) Paragraph 2 of subsection 77.11 (7) of the Act, as enacted by subsection (1), is amended by striking out "on the wind up of the pension plan in whole" in the portion before subparagraph i and substituting "on the wind up of the pension plan".
(7) Paragraph 3 of subsection 77.11 (7) of the Act, as enacted by subsection (1), is repealed.
(8) Section 77.11 of the Act, as enacted by subsection (1), is amended by adding the following subsections:
Arbitration award
(9) If a pension plan is being wound up in whole or in part, an arbitration award made in accordance with section 77.12 may provide for the allocation of surplus between the employer, members, former members and other persons entitled to a pension, deferred pension or other benefit under the plan who are affected by the wind up or partial wind up.
Effect of arbitration award
(10) An arbitration award prevails over any document that creates and supports the pension plan and pension fund, it prevails over subsections (3) and (4), and it prevails despite any trust that may exist in favour of any person.
(9) Subsection 77.11 (9) of the Act, as enacted by subsection (8), is amended by striking out "the employer, members, former members" and substituting "the employer, members, former members, retired members".
(10) Subsection 77.11 (9) of the Act, as enacted by subsection (8), is amended,
(a) by striking out "wound up in whole or in part" and substituting "wound up"; and
(b) by striking out "or partial wind up" at the end.
27. (1) The Act is amended by adding the following section:
Arbitration re allocation of surplus on wind up
77.12 (1) This section applies with respect to the wind up of a pension plan in whole or in part,
(a) if the Superintendent has not consented, before the expiry of the prescribed period after the date of the wind up, to the payment of surplus to the employer; and
(b) if no agreement described in subsection 77.11 (7) is entered into before the expiry of the prescribed period after the date of the wind up.
Proposal for arbitration
(2) Any of the following persons may file a notice with the Superintendent proposing that arbitration be used to allocate the surplus under the pension plan, and the notice must be accompanied by such information and documents as may be prescribed or as may be specified by the Superintendent:
1. The employer.
2. A trade union that represents members of the pension plan or that, on the date of the wind up, represented members or former members of the pension plan.
3. Any member of the pension plan.
4. Any former member or other person who is entitled to payments under the pension plan as of the date of the wind up.
Same
(3) The employer or the trade union, if any, may file the notice with the Superintendent either before or after the expiry of the prescribed period after the date of the wind up.
Proposal by Superintendent
(4) The Superintendent, on his or her own initiative, may propose that arbitration be used to allocate the surplus under the pension plan, and may do so either before or after the expiry of the prescribed period after the date of the wind up.
Information
(5) At the Superintendent's request, the employer and the administrator of the pension plan shall give the Superintendent such additional information and documents as the Superintendent may specify in connection with the proposed arbitration.
Notice of proposed arbitration
(6) The Superintendent may require the administrator to give notice of the proposed arbitration to the persons and in the manner specified by the Superintendent and within a specified period, and the administrator shall do so.
Same
(7) When deciding whether to require an administrator to give notice of the proposed arbitration, and the time and manner in which any notice is to be given, the Superintendent may consider the factors that he or she considers appropriate, including such factors as may be prescribed.
Appointment of arbitrator
(8) An arbitrator may be appointed by an agreement entered into by the persons who would be authorized to make an agreement under subsection 77.11 (7) and, if no agreement to appoint an arbitrator is reached before the expiry of the prescribed period after notice is given under subsection (6), the Superintendent may appoint an arbitrator if and when he or she considers it appropriate to do so.
Same
(9) When deciding whether, or when, to appoint an arbitrator, the Superintendent may consider the factors that he or she considers appropriate, including such factors as may be prescribed.
Effect of appointment
(10) If an arbitrator is appointed, either by agreement or by the Superintendent, all of the persons described in paragraphs 1 to 4 of subsection (2) are deemed to have agreed to arbitration under this section and none of them is permitted to commence a civil proceeding in respect of any person's entitlement to surplus under the pension plan.
Jurisdiction of arbitrator
(11) The arbitrator shall make an arbitration award allocating the surplus or determining the manner in which the surplus is to be allocated and the proportions to be allocated to the affected persons or classes of persons.
Same
(12) When making an arbitration award, the arbitrator may consider the factors that he or she considers appropriate, including such factors as may be prescribed.
Parties
(13) The parties to the arbitration are determined in accordance with the regulations, but the Superintendent is not a party to any arbitration under this section.
Procedures, etc.
(14) The Arbitration Act, 1991 applies with respect to the arbitration, with such restrictions and exclusions as may be prescribed by regulation, and the regulations may establish requirements that apply with respect to arbitrations under this section.
Effect of arbitration award
(15) The arbitration award is final and binds the parties to the arbitration and every other person affected by it.
Costs of arbitration
(16) The arbitrator shall determine how and by whom the costs of the arbitration shall be paid, including whether the costs may be paid out of the pension fund, but the arbitrator cannot order the Superintendent to pay any of the costs of the arbitration.
Transition
(17) If the date of the wind up or partial wind up of a pension plan falls before the day on which this section comes into force, and if there is no written agreement before this section comes into force with respect to the payment of surplus, the allocation of the surplus may be determined by arbitration under this section within the prescribed transitional period and in accordance with such requirements as may be prescribed.
(2) Subsection 77.12 (1) of the Act, as enacted by subsection (1), is amended by striking out "the wind up of a pension plan in whole or in part" in the portion before clause (a) and substituting "the wind up of a pension plan".
(3) Paragraph 4 of subsection 77.12 (2) of the Act, as enacted by subsection (1), is amended by striking out "Any former member" at the beginning and substituting "Any former member, retired member".
28. (1) Subsection 78 (1) of the Act is amended by striking out "No money" at the beginning and substituting "No money that is surplus".
(2) Subsections 78 (4) and (5) of the Act are repealed.
29. (1) Clauses 79 (1) (b), (c), (d) and (e) of the Act are repealed and the following substituted:
(b) the withdrawal of surplus by the employer while the pension plan continues in existence is authorized either as provided in section 77.11 or by a court order declaring that the employer is entitled to the surplus while the plan continues;
(c) where all pension benefits under the pension plan are guaranteed by an insurance company, an amount equal to at least two years of the normal cost of the pension plan, determined in accordance with the regulations, is retained in the pension fund as surplus;
(d) the greater of the following amounts is retained in the pension fund as surplus:
(i) the sum of "A" and "B" where,
"A" is an amount equal to twice the normal cost of the pension plan, and
"B" is an amount equal to 5 per cent of the liabilities of the pension plan, determined in accordance with the regulations, and
(ii) an amount equal to 25 per cent of the liabilities of the pension plan, determined in accordance with the regulations; and
(2) Subsection 79 (2) of the Act is repealed.
(3) Subsection 79 (3) of the Act is repealed and the following substituted:
Wind up, payment to employer
(3) Subject to section 89, the Superintendent shall not consent to payment of surplus to an employer out of a pension plan that is being wound up in whole unless,
(a) the Superintendent is satisfied, based on reports provided with the employer's application for payment of the surplus, that the pension plan has a surplus;
(b) the payment of surplus to the employer on the wind up of the pension plan is authorized either as provided in section 77.11 or by a court order declaring that the employer is entitled to the surplus when the plan is being wound up;
(c) provision has been made for the payment of all liabilities of the pension plan as calculated for purposes of the termination of the pension plan; and
(d) the applicant and the pension plan comply with all other requirements prescribed under other sections of this Act in respect of the payment of surplus.
(4) Subsection 79 (3) of the Act, as re-enacted by subsection (3), is amended by striking out "being wound up in whole" in the portion before clause (a) and substituting "being wound up".
(5) Clause 79 (3) (b) of the Act, as re-enacted by subsection (3), is amended by striking out "section 77.11 or" and substituting "section 77.11, or by an arbitration award made under section 77.12, or".
(6) Subsections 79 (3.1) and (3.2) of the Act are repealed and the following substituted:
Same, partial wind up
(3.1) Subject to section 89, the Superintendent shall not consent to payment of surplus to an employer out of a pension plan that is being wound up in part unless,
(a) all of the criteria described in clauses (3) (a), (c) and (d) are satisfied; and
(b) the payment of surplus to the employer on the partial wind up of the pension plan is authorized either as provided in section 77.11 or by a court order declaring that the employer is entitled to the surplus when the plan is being wound up in part.
(7) Clause 79 (3.1) (b) of the Act, as re-enacted by subsection (6), is amended by striking out "section 77.11 or" and substituting "section 77.11, or by an arbitration award made under section 77.12, or".
(8) Subsection 79 (3.1) of the Act, as re-enacted by subsection (6), is repealed.
(9) Subsection 79 (4) of the Act is repealed and the following substituted:
Wind up, payment to members, etc.
(4) If a pension plan is being wound up in whole or in part, payment from surplus may be made to or for the benefit of members, former members and other persons, other than an employer, who are entitled to payments under the plan as of the date of the wind up or partial wind up.
(10) Subsection 79 (4) of the Act, as re-enacted by subsection (9), is amended by striking out "former members" and substituting "former members, retired members".
(11) Subsection 79 (4) of the Act, as re-enacted by subsection (9), is amended,
(a) by striking out "being wound up in whole or in part" and substituting "being wound up"; and
(b) by striking out "or partial wind up" at the end.
30. (1) The Act is amended by adding the following section before the heading "Asset Transfers Between Pension Plans":
Superintendent's order re surplus
79.0.1 (1) The Superintendent may order the administrator of a pension plan to distribute surplus in accordance with a written agreement described in subsection 77.11 (7).
Same
(2) The order of the Superintendent is final.
Enforcement
(3) An order under this section, excluding the reasons for the order, may be filed in the Superior Court of Justice and upon being filed it is enforceable as an order of that Court.
(2) Subsection 79.0.1 (1) of the Act, as enacted by subsection (1), is amended by adding at the end "or an arbitration award made under section 77.12".
31. (1) Clause 79.1 (1) (a) of the Act is amended by striking out "80.2 or 81" and substituting "80.2, 80.3 or 81".
(2) Section 79.1 of the Act is amended by adding the following subsection:
Transfers re target benefits
(3) No person shall transfer assets between pension plans if the transferred assets relate to the provision of target benefits unless the transfer satisfies the prescribed requirements and the Superintendent has consented in advance to the transfer.
32. (1) Section 79.2 of the Act is amended by adding the following subsection:
Same, transfers between certain public sector pension plans
(2.1) For a transfer of assets to which section 80.3 applies,
(a) subsections (4), (5), (6), (7) and (14) apply, with necessary modifications, with respect to the original pension plan and its administrator; and
(b) subsections (8) and (9) apply with respect to individuals.
(2) Subsection 79.2 (7) of the Act is amended by adding at the end "including any requirement to give notice about the transfer".
(3) Subsection 79.2 (8) of the Act is repealed and the following substituted:
Transfer to prescribed retirement savings arrangement
(8) If the amount of the assets to be transferred in relation to an individual's pension benefits and other benefits under the original pension plan is greater than the amount allowed under the Income Tax Act (Canada) for such a transfer, the administrator of the original pension plan shall pay the portion that exceeds that allowed amount into a prescribed retirement savings arrangement on behalf of the individual.
33. (1) Section 80 of the Act, as re-enacted by the Statutes of Ontario, 2010, chapter 9, section 68, is amended by adding the following subsection:
Same, transfers between certain public sector pension plans
(2.1) If section 80.3 applies with respect to a transfer of assets,
(a) subsections (3) and (5) to (9) apply, with necessary modifications, with respect to the transfer; and
(b) if the transfer requires the consent of the eligible former employee and if he or she does not consent to the transfer, clauses (4) (a) and (c) apply.
(2) Paragraph 3 of subsection 80 (13) of the Act is repealed and the following substituted:
3. The administrators of the two pension plans must have agreed upon the manner of determining the amount of the assets to be transferred, and the applicant must give the Superintendent notice of their agreement.
(3) Paragraph 6 of subsection 80 (13) of the Act is amended by striking out "the value of the assets to be transferred" and substituting "the amount of assets to be transferred".
34. (1) Clause 80.1 (4) (d) of the Act is repealed and the following substituted:
(d) establishing the manner of determining the amount of assets to be transferred.
(2) Paragraph 2 of subsection 80.1 (9) of the Act is repealed and the following substituted:
2. The transfer agreement must establish the manner of determining the amount of assets to be transferred.
35. Subsection 80.2 (4) of the Act is amended by adding at the end "or in such other circumstances as may be prescribed".
36. The Act is amended by adding the following section:
Transfers between certain public sector pension plans
Definitions
80.3 (1) In this section,
"federal public service" has the same meaning as "public service" in subsection 2 (1) of the Public Service Employment Act (Canada); ("fonction publique fédérale")
"Public Service Superannuation Plan (Canada)" means the pension plan established under the Public Service Superannuation Act (Canada). ("Régime de pension de retraite de la fonction publique (Canada)")
Interpretation
(2) Expressions used in this section have the same meaning as in section 80 unless the context requires otherwise.
Eligible former employees
(3) A person who ceases to be employed in the Ontario public sector is an eligible former employee for the purposes of this section if he or she becomes an employee in the federal public service in connection with the sale of a business to the Government of Canada.
Application
(4) This section applies with respect to the transfer of assets from such public sector pension plans as may be prescribed to the Public Service Superannuation Plan (Canada) in respect of eligible former employees.
Requirement for Superintendent's consent
(5) The Superintendent's prior consent is required to authorize a transfer of assets from the original pension plan to the successor pension plan, and the Superintendent shall consent to the transfer if the requirements of this Act are satisfied.
Same
(6) The administrator of the original pension plan or such other person as may be prescribed may apply for the Superintendent's consent to the transfer of assets from the original pension plan to the successor pension plan.
Same, if eligible former employee's consent is required
(7) If the employers' agreement requires the prior consent of an eligible former employee to the transfer of assets in respect of his or her benefits and if the eligible former employee gives his or her consent in accordance with the agreement, the administrator of the original pension plan is authorized to transfer the assets in accordance with the employers' agreement.
Commuted value
(8) If the pension benefits and other benefits to be provided under the successor pension plan for the eligible former employees are not the same as the pension benefits and other benefits provided for them under the original pension plan, the commuted value of the benefits provided for them under the successor pension plan must not be less than the commuted value of the benefits provided for them under the original pension plan, as adjusted for any payments made from the original pension plan to a prescribed retirement savings arrangement or directly to the eligible former members in connection with the transfer of assets.
Same
(9) The commuted value of the benefits referred to in subsection (8) is determined as of the effective date of the transfer of the assets.
37. (1) Paragraph 1 of subsection 81 (6) of the Act, as enacted by the Statutes of Ontario, 2010, chapter 9, subsection 70 (4), is repealed and the following substituted:
1. The administrators of the two pension plans must have agreed upon the manner of determining the amount of assets to be transferred, and the applicant must give the Superintendent notice of their agreement.
(2) Paragraph 4 of subsection 81 (6) of the Act, as enacted by the Statutes of Ontario, 2010, chapter 9, subsection 70 (4), is amended by striking out "the value of the assets to be transferred" and substituting "the amount of assets to be transferred".
38. (1) Paragraphs 1 and 2 of section 85 of the Act are repealed and the following substituted:
1. The payment of a pension or pension benefit under a pension plan that has been established or maintained for less than five years at the date of the wind up, if the date of the wind up is on or after the date on which the Securing Pension Benefits Now and for the Future Act, 2010 received Royal Assent.
1.1 The payment of a pension or pension benefit under a pension plan that has been established or maintained for less than three years at the date of the wind up, if the date of the wind up is before the date on which the Securing Pension Benefits Now and for the Future Act, 2010 received Royal Assent.
2. Any increase to a pension or pension benefit or increase to the value of a pension or pension benefit that became effective within five years before the date of the wind up, if the date of the wind up is on or after the date on which the Securing Pension Benefits Now and for the Future Act, 2010 received Royal Assent.
2.1 Any increase to a pension or pension benefit or increase to the value of a pension or pension benefit that became effective within three years before the date of the wind up, if the date of the wind up is before the date on which the Securing Pension Benefits Now and for the Future Act, 2010 received Royal Assent.
(2) Section 85 of the Act is amended by adding the following paragraph:
5.1 Pension benefits that are target benefits.
(3) Section 85 of the Act is amended by adding the following paragraph:
5.2 Optional benefits.
39. (1) Clauses 87 (4) (a) and (b) of the Act, as enacted by the Statutes of Ontario, 2010, chapter 9, section 75, are repealed and the following substituted:
(a) that the assumptions or methods used in the preparation of a report required under this Act or the regulations in respect of a pension plan are not consistent with accepted actuarial practice;
(b) that the assumptions or methods used in the preparation of a report required under this Act or the regulations in respect of a pension plan are inappropriate in the circumstances for the pension plan, whether or not those assumptions or methods are otherwise consistent with accepted actuarial practice; or
(2) Section 87 of the Act, as re-enacted by the Statutes of Ontario, 2010, chapter 9, section 75, is amended by adding the following subsection:
Same
(5.1) An order under subsection (4) may specify one or more deadlines or periods for complying with the order.
(3) Subsection 87 (8) of the Act, as enacted by the Statutes of Ontario, 2010, chapter 9, section 75, is repealed.
(4) Section 87 of the Act, as re-enacted by the Statutes of Ontario, 2010, chapter 9, section 75, is amended by adding the following subsection:
Effective date of order
(10) The order under subsection (6) takes effect on the later of,
(a) the latest date on which a person is served under subsection (9) with a copy of the order; and
(b) the date specified in the order.
40. Section 88 of the Act, as re-enacted by the Statutes of Ontario, 2010, chapter 9, section 75, is repealed and the following substituted:
Tribunal hearing re special orders
88. (1) A person who is required to comply with an order made under subsection 87 (6) is entitled to a hearing by the Tribunal about the order if the person delivers a written request to the Tribunal within 30 days after a copy of the order is served on the person.
Effect of request
(2) The request for a hearing by the Tribunal does not stay the order, but the Tribunal may grant a stay until it disposes of the request.
Hearing
(3) Upon receiving the request made in accordance with subsection (1), the Tribunal shall appoint a time for and hold the hearing.
Parties
(4) The parties to the hearing are the person who requests the hearing, the Superintendent and such other persons as the Tribunal specifies.
Power of Tribunal
(5) At or after the hearing, the Tribunal by order may confirm, vary or revoke the order or substitute another order.
41. The Act is amended by adding the following heading before section 89:
Notices of, and Appeals From, Intended Decisions and Orders
42. (1) Subsection 89 (1) of the Act is repealed and the following substituted:
Notices and hearings
Notice of intention re registration
(1) If the Superintendent intends to refuse to register a pension plan, an amendment to a pension plan or part of an amendment to a pension plan or to revoke such a registration, the Superintendent shall serve notice of the intended decision, together with written reasons for it, on the applicant or administrator of the plan.
(2) Subsection 89 (2) of the Act is amended by striking out the portion before paragraph 1 and substituting the following:
Notice of intention re various orders
(2) If the Superintendent intends to make or refuse to make any of the following orders, the Superintendent shall serve notice of the intended decision, together with written reasons for it, on the administrator of the pension plan and on any other person to whom the intended order is to be directed:
. . . . .
(3) Subsection 89 (2) of the Act is amended by adding the following paragraph:
1.1 An order under subsection 68 (6) (effective date of a wind up).
(4) Subsection 89 (3) of the Act is repealed and the following substituted:
Notice of intention re membership
(3) If the Superintendent intends to make or refuse to make an order requiring an administrator to accept an employee as a member of a class of employees for whom a pension plan is established or maintained, the Superintendent shall serve notice of the intended decision, together with written reasons for it, on the administrator of the pension plan and the Superintendent shall serve, or require the administrator to serve, a copy of the notice and written reasons on the employee.
(5) Section 89 of the Act is amended by adding the following subsection:
Notice re reimbursement of overpayment, etc.
(3.0.1) If the Superintendent intends to consent or refuse to consent under subsection 62.1 (5) to a payment from the pension fund to the employer, the Superintendent shall serve notice of the intended decision, together with written reasons for it, on the applicant and the Superintendent may require the applicant to transmit a copy of the notice and written reasons to such other persons or classes of persons or both as the Superintendent specifies in the notice to the applicant.
(6) Subsection 89 (3.1) of the Act is repealed and the following substituted:
Notice re payment of surplus
(3.1) If an application is filed in accordance with subsection 78 (2) for the payment of surplus to the employer and the Superintendent intends to consent or refuse to consent under subsection 78 (1), the Superintendent shall serve notice of the intended decision, together with written reasons for it, on the applicant and on any person who made written representations to the Superintendent in accordance with subsection 78 (3).
(7) Subsection 89 (3.2) of the Act is repealed.
(8) Subsection 89 (4) of the Act is repealed and the following substituted:
Notice re terms and conditions of approval or consent
(4) If the Superintendent intends to refuse to give an approval or consent or intends to attach terms and conditions to an approval or consent under this Act or the regulations, other than a consent referred to in subsection (3.0.1) or (3.1), the Superintendent shall serve notice of the intended decision, together with written reasons for it, on the applicant for the approval or consent.
(9) Subsection 89 (5) of the Act is repealed and the following substituted:
Notice re wind up order
(5) If the Superintendent intends to make an order requiring the wind up of a pension plan or declaring a pension plan wound up, the Superintendent shall serve notice of the intended decision, together with written reasons for it, on the administrator and the employer, and the Superintendent may require the administrator to transmit a copy of the notice and written reasons to such other persons or classes of persons or both as the Superintendent specifies in the notice to the administrator.
(10) Subsection 89 (6) of the Act is amended by striking out "subsection (1), (2), (3), (3.1), (3.2), (4) or (5)" and substituting "subsection (1), (2), (3), (3.0.1), (3.1), (4) or (5)".
(11) The English version of subsection 89 (7) of the Act is amended by striking out "the Superintendent may carry out the proposal stated in the notice" at the end and substituting "the Superintendent may make the intended decision indicated in the notice".
(12) The English version of subsection 89 (9) of the Act is amended by striking out "to carry out or refrain from carrying out the proposal" and substituting "to make or refrain from making the intended decision indicated in the notice".
43. Section 98 of the Act is repealed and the following substituted:
Order to provide information to the Superintendent
98. (1) The Superintendent may, by order, require an employer, an administrator or any other person to give such information as the order specifies to the Superintendent or a person designated by the Superintendent for the purpose of enabling the Superintendent or designate to ascertain whether this Act and the regulations are being complied with.
Contents
(2) Without limiting the generality of subsection (1), the order may require the administrator to secure an appraisal of any or all of the assets of the pension fund by one or more independent valuators and provide the appraisal to the Superintendent or designate or it may authorize the Superintendent to obtain an appraisal at the administrator's expense.
Same
(3) The order may specify the form in which information is to be provided and the time within which it is to be provided to the Superintendent or designate.
Same
(4) The order has no effect unless the reasons for the order are set out in it.
Enforcement
(5) An order under this section, excluding the reasons for the order, may be filed in the Superior Court of Justice and upon being filed it is enforceable as an order of that court.
44. Section 105 of the Act is repealed and the following substituted:
Extension of time
Procedural time limits
105. (1) Upon application by an affected person, the Superintendent may extend the following time limits, before or after they have expired, if the Superintendent is satisfied that there are reasonable grounds for doing so:
1. A procedural time limit related to the powers and duties of the Superintendent under this Act or the regulations.
Filing deadlines
(2) Upon application by an affected person, the Superintendent may extend the following time limits subject to the limits indicated, before or after they have expired, if the Superintendent is satisfied that there are reasonable grounds for doing so:
1. A time limit related to the filing of such documents as may be prescribed that, under this Act or the regulations, must be filed. The time limit may be extended for a maximum of 60 days and, if the Superintendent is satisfied that extraordinary grounds exist and that no person will be unduly prejudiced, for further periods.
Conditions
(3) When extending a time limit under this section, the Superintendent may impose such conditions as he or she considers appropriate in the circumstances.
45. Paragraph 2 of subsection 106 (1) of the Act is repealed and the following substituted:
2. A person designated by the Superintendent, and the designate does not have to be a person who is employed in the Commission.
46. (1) Subsection 115 (1) of the Act is amended by adding the following clause:
(h) prescribing requirements and restrictions that apply with respect to actuarial methods and assumptions that may be used in the preparation of reports required under this Act or the regulations;
(2) Section 115 of the Act is amended by adding the following subsection:
Public sector pension plans
(5.1) Different requirements may be prescribed for public sector pension plans than are prescribed for other classes of pension plans.
47. The Act is amended by adding the following section:
Review of Act, regulations
116. The Minister shall initiate a review of this Act and the regulations, or portions of this Act and the regulations, every five years beginning within five years after this section comes into force.
Consequential Amendments
Pension Benefits Amendment Act, 2010
48. (1) Subsections 49 (5) and (6) of the Pension Benefits Amendment Act, 2010 are repealed.
(2) Section 53 of the Act is repealed.
(3) Subsection 63 (4) of the Act is repealed.
(4) Subsections 63 (5), (7) and (8) of the Act are repealed.
(5) Subsection 63 (10) of the Act is repealed.
(6) Section 76 of the Act is repealed.
Commencement and Short Title
Commencement
49. (1) Subject to subsections (2), (3) and (4), this Act comes into force on the day it receives Royal Assent.
Same
(2) Subsection 1 (10) comes into force on the later of the day this Act receives Royal Assent and the day subsection 3 (3) of the Not-for-Profit Corporations Act, 2010 comes into force.
Same
(3) Subsections 3 (1) and (4) come into force on July 1, 2012.
Same
(4) The following provisions come into force on a day to be named by proclamation of the Lieutenant Governor:
1. Subsections 1 (1) to (3), (5), (8) and (9).
2. Section 2.
3. Subsections 3 (2), (3) and (5).
4. Sections 4 and 5.
5. Subsection 8 (2).
6. Sections 9 to 18 and 20.
7. Subsections 21 (4), (5) and (7).
8. Sections 22, 24 and 25.
9. Subsections 26 (2) to (10).
10. Section 27.
11. Subsections 29 (1), (4), (5), (7), (8), (10) and (11) and subsection 30 (2).
12. Sections 31 to 40, 44, 47 and 48.
Short title
50. The short title of this Act is the Securing Pension Benefits Now and for the Future Act, 2010.
EXPLANATORY NOTE
This Explanatory Note was written as a reader's aid to Bill 120 and does not form part of the law. Bill 120 has been enacted as Chapter 24 of the Statutes of Ontario, 2010.
The Bill amends the Pension Benefits Act. Here are some highlights of the proposed amendments.
Types of benefits and pension plans
Currently, the Act authorizes pension plans to provide pension benefits that are called "defined benefits" and pension benefits that are called "defined contribution benefits". It also authorizes pension plans to provide other benefits that are called "ancillary benefits". Amendments to the Act relate to the payment of defined contribution benefits, and introduce two new categories of benefits into the Act, "target benefits" and "optional benefits".
Defined contribution benefits: A new section 39.1 of the Act, which deals with defined contribution benefits, governs the payment of pensions and pension benefits under pension plans that provide defined contribution benefits.
Target benefits: A new section 39.2 of the Act governs target benefits, which are not currently referred to in the Act. A pension plan provides target benefits if certain criteria set out in the Act are satisfied. Additional criteria may be prescribed.
Optional benefits: A new section 40.1 of the Act governs optional benefits, which are not currently authorized under the Act. If a defined benefit pension plan provides for optional benefits, members may obtain them by making optional contributions in accordance with the pension plan. Optional contributions may only be used to provide optional benefits.
Funding requirements
Certain funding requirements under the Act for pension plans are changed. These requirements relate to the funding of solvency deficiencies of certain jointly sponsored pension plans, the funding of benefit improvements for defined benefits, the authority for contribution holidays, and the authority to use letters of credit in specified circumstances.
Funding of jointly sponsored pension plans: A new subsection 1 (2.1) of the Act, together with amendments to subsection 10 (3) of the Act, enable pension plans that are jointly sponsored pension plans on August 24, 2010 to cease requiring contributions to be made for solvency deficiencies.
Funding of benefit improvements: A new section 14.0.1 of the Act restricts the circumstances in which a pension plan can be amended to authorize benefit improvements.
Contribution holidays: A new section 55.1 of the Act sets out the circumstances in which employers and members are permitted to reduce or suspend contributions under a pension plan. However, contributions cannot be reduced or suspended if the pension plan prohibits it.
Letters of credit: A new section 55.2 of the Act governs the circumstances in which an employer is permitted to provide a letter of credit when a pension plan has a solvency deficiency. However, a letter of credit cannot be used if the pension plan is a multi-employer pension plan. Nor can a letter of credit be used for a public sector pension plan, unless it is a prescribed public sector pension plan. A letter of credit may be used for only a portion of the contributions that are otherwise required in connection with the solvency deficiency.
Entitlement to surplus
Changes are made to the current requirements of the Act that govern the payment of surplus to employers. The current requirements are set out in sections 78 and 79 of the Act. The revised requirements are set out in the new sections 77.11 and 77.12 of the Act as well as in the amended sections 78 and 79.
Agreements about surplus: Currently, the Act specifies the circumstances in which surplus can be paid to an employer from a pension fund. If a pension plan is being wound up in whole or in part, clauses 79 (3) (b) and 79 (3.1) (b) of the Act authorize surplus to be paid to an employer with the written agreement of specified persons.
A new subsection 77.11 (7) of the Act enables a written agreement to be used to authorize the payment of surplus to an employer out of a continuing pension plan as well as out of a pension plan that is being wound up in whole or in part. The subsection sets out requirements that apply with respect to the agreement. An agreement prevails over the documents that create and support the pension plan and pension fund.
For partial wind ups, the Act currently contains unproclaimed provisions to repeal provisions that authorize or govern the partial wind up of pension plans. Similar arrangements are made in this Bill for the future repeal of any new references to partial wind ups.
Arbitration: A new section 77.12 of the Act provides for the use of arbitration to allocate surplus in connection with the wind up of a pension plan in whole or in part. The circumstances in which arbitration can be used are specified. An arbitration award prevails over the documents that create and support the pension plan and pension fund.
Pension Benefits Guarantee Fund
Currently, section 85 of the Act lists the pension benefits that are not guaranteed by the Pension Benefits Guarantee Fund when a pension plan is being wound up in whole or in part. Amendments make changes to this list.
Paragraph 1 of section 85 of the Act currently specifies that the Guarantee Fund does not guarantee pensions and pension benefits under a pension plan established for less than three years on the date of the wind up, and paragraph 2 of section 85 currently specifies that it does not guarantee increases to pensions and pension benefits that take effect within three years before the date of the wind up. Amendments extend these three-year periods to five years.
The new paragraphs 5.1 and 5.2 of section 85 of the Act specify that target benefits and optional benefits are not guaranteed by the Guarantee Fund.
Administration of pension plans
A variety of amendments are made with respect to the administration of pension plans.
Administration costs: A new section 22.1 of the Act provides that reasonable fees and expenses for the administration of a pension plan and the administration and investment of the pension fund are payable out of the pension fund. Certain exceptions are specified.
Transfer of assets for a former member: Currently, clause 42 (1) (a) of the Act authorizes a former member of a pension plan to require an amount to be transferred to another pension plan, if the administrator of the other plan agrees to the transfer. The new subsection 42 (1.1) specifies the classes of pension plan to which such a transfer may be made.
Overpayments by employers: Currently, subsections 78 (4) and (5) of the Act provide for the reimbursement of an employer for overpayments into a pension fund. Those provisions are re-enacted as the new section 62.1.
Public sector pension plans, employee transfers to the federal public service: A new section 80.3 of the Act applies when Ontario public sector employees are transferred to the federal public service. The new section governs the transfer of assets for eligible public sector employees from prescribed public sector pension plans to the Public Service Superannuation Plan (Canada).
Regulatory oversight and enforcement
Appointment of an administrator: Amendments to section 8 of the Act authorize the Superintendent to appoint an administrator for a pension plan, or to act as administrator, in prescribed circumstances. Currently, the Superintendent's authority to appoint an administrator is restricted: section 71 of the Act authorizes the appointment of an administrator in connection with the wind up of a pension plan in whole or in part.
Actuarial methods and assumptions: Under an amended subsection 87 (4) of the Act, and under the new clause 115 (1) (h) of the Act, restrictions may be imposed on the actuarial assumptions and methods that may be used in the preparation of reports about pension plans or pension funds. The amended subsection 87 (4) deals with the Superintendent's authority to make an order in a particular case, and clause 115 (1) (h) authorizes regulations to be made.
Proposed decisions: Currently, section 89 of the Act imposes specified requirements on the Superintendent when he or she proposes to make certain decisions under the Act. Technical changes are made to the terminology used in this section.
Deadline extensions: Currently, section 105 authorizes the Superintendent to extend procedural deadlines. The new subsection 105 (2) of the Act authorizes the Superintendent to extend deadlines for filing documents. Certain restrictions are specified.
Other amendments
A new section 116 of the Act requires the Minister of Finance to initiate a review of the Act and regulations, or a review of portions of the Act and regulations, every five years.
Technical and complementary amendments are made throughout the Act. Complementary amendments are also made to unproclaimed provisions of the Pension Benefits Amendment Act, 2010.