Amendments to Pension Benefit Act
The Pension Benefits Act (Ontario) (PBA) was amended in 2016 to give the Superintendent of Pensions the authority to impose administrative monetary penalties (“AMPs”) in certain circumstances. Supporting regulations have now been finalized and the new administrative penalty regime came into force on January 1, 2018.
Over the course of the past year, Ontario has been moving to a stronger enforcement regime. Late in 2016, Ontario introduced legislation establishing a new financial services regulator, the Financial Services Regulatory Authority (“FSRA”), which will take over regulatory responsibilities from the existing Financial Services Commission of Ontario. In conjunction with the introduction of the FSRA legislation, the Government of Ontario also took the first steps to bring in AMPs.
The legislative changes are intended to promote compliance and to give the Superintendent the power to impose general or summary administrative monetary penalties (AMPs) on a person (e.g. corporation, plan sponsor or plan administrator) or an individual if the Superintendent is satisfied that the person is not complying with the PBA. Under the amendment, AMPs fall into one of two categories; (1) general administrative penalties; and (2) summary administrative penalties. The Superintendent will determine the amount of the general administrative penalty, subject to maximum defined penalties ($25,000 for a person other than an individual and $10,000 for an individual). Daily penalties for summary administrative penalties range from $100 to $200 per day, subject to the same maximums as identified under general administrative penalties. For both general and summary administrative penalties, the Superintendent must give notice of an intended penalty to the person or individual, and the recipient of the notice may appeal the intended penalty in writing to the Financial Services Tribunal within 15 days after the notice is given. Payment of both types of administrative penalties cannot be made from the pension fund.
Some examples of general administrative penalties are:
- failure to administer the plan in accordance with its registered plan terms
- failure to disclose information to employees and/or members within the required timeframes
- failure to apply for registration of a plan amendment within the required timelines
- failure to remit plan (member and employer) contributions within the prescribed timelines
Some examples of summary administrative penalties are:
- failure to file the annual information return on time,
- failure to file the financial statements on time
- failure to file the SIP&P or applicable amendments on time
- failure to file the actuarial valuation report (where applicable) on time
For more information about the AMP regime, please contact CBA Canada or go to the Administrative Penalties.