Almost 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 issues
proclamation of the "retired member" provisions in
implementation of immediate vesting for plan members (the 2012
Budget indicates that this change will come into effect on July 1,
increases to the threshold for the pay out of "small
clarification of the surplus withdrawal rules.
The draft regulations also include certain
"housekeeping" amendments to reflect changes to the
Income Tax Act regarding Individual Pension Plans, revoke
provisions for "qualifying plans" and clarify the PBA
provisions with respect to crediting interest.
In addition to the draft regulations, the government has also released a discussion paper that provides some indication
of the prescribed requirements which will apply to the new grow-in
provisions and to the Superintendent's authority to order a
pension plan wind-up.
For example, under the new rules, grow-in benefits will be
extended to all employees whose employment has been terminated
(other than those dismissed for wilful misconduct, disobedience or
wilful neglect of duty) or upon the occurrence of other events to
be prescribed. The paper suggests that such an "activating
event" would also include circumstances "where an
employer has given notice of termination of employment to an
employee and that person decides to end his or her employment
within 60 days in advance of the termination date" (the
purpose being to ensure that employees who leave a terminated
position early to pursue another job do not lose their entitlement
to grow-in benefits). On the other hand, the termination of a plan
member who was hired on the basis that his/her employment would end
on the expiry of a fixed term contract or on the completion of a
specific task would not be an activating event.
The discussion paper also considers the requirements that would
apply to jointly sponsored and multi-employer pension plans that
elect to opt out of the grow-in regime. For instance, it considers
the information to be included in the election form, the applicable
notice requirements and the process for rescinding an
With respect to the Superintendent's authority to order a plan
wind-up, the discussion paper proposes that the regulator be
allowed to order a wind-up if: (i) the plan has no (active) members
(i.e., it has only former members, retired members and
beneficiaries who are not members); or (ii) members of the pension
plan no longer accrue pension benefits or ancillary benefits under
the plan and employees are no longer allowed to become members of
Comments on both the draft regulations and the discussion paper are
due by June 1, 2012. We will be reviewing these regulations in
further detail and will provide any additional commentary in future
Paul is Chair of the Pensions & Benefits
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In an unprecedented decision from last May (and worth discussing again), the Ontario Human Rights Tribunal awarded a migrant worker $150,000 in compensation for injury to her dignity, feelings, and self-respect under the Ontario Human Rights Code.