New Administrative Penalties for Pension Plans in Ontario

October 2, 2017

Ontario's new administrative monetary penalties for contraventions of the Pension Benefits Act (Ontario) will come into effect on January 1, 2018. The penalties are intended to promote compliance with the statute and to prevent anyone from deriving an economic benefit from non-compliance.

The various contraventions that may attract penalties are set out in regulations. They focus extensively on observing time limits, many of which have may not been strictly observed in the past. Among the deadlines now subject to penalties:

  • Notices of plan amendments to affected members
  • All member statements (annual, termination, retirement, death)
  • Payments of commuted values and death benefits
  • Providing information to employees eligible for plan membership

In addition, there are some contraventions that are general in nature, such as administering and investing the plan in accordance with the Act.

There are two types of penalties: general penalties will apply to the failure to comply with 109 particular provisions of the Act and regulations, and carry maximum fines of $10,000 for individuals and $25,000 for corporations and others. The amount of the penalty will depend on the following factors:

  • Whether the breach was intentional, reckless or negligent
  • The extent of the harm or potential harm to others
  • Whether the person tried to mitigate or take any other remedial action
  • Whether the person derived an economic benefit from the breach
  • Any other contraventions in the past five years.

The Superintendent of Financial Services must give notice before issuing a general penalty, and there is a 15 day period to request a hearing to contest the proposed penalty.

The second type of penalty are summary penalties. They will apply to the failure to meet 12 specific deadlines relating to the filing of actuarial valuation reports, audited financial statements and statements of investment policies and procedures. Daily penalties range from $100 to $200.

The Superintendent must provide an opportunity to make written submissions before issuing a summary penalty.

In all cases, there is a five year limitation period. Administrative penalties can be imposed on their own or in conjunction with any other regulatory measure under the Act, including prosecution or order.

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