Frequently Asked Questions - Single Employer Pension Plans (SEPPs) to Jointly Sponsored Pension Plans (JSPPs)

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Notice requirements under section 5 of Regulation 311/15 (the Regulation)

 
Q10.  Can any of the notices required to be sent to members, deferred members, retired members and other persons entitled to benefits under section 5 of the Regulation in respect of a single employer pension plan (SEPP) and a jointly sponsored pension plan (JSPP) be combined into a single notice for each person?
 
A10.  No. Where there is a proposed conversion of a SEPP to a JSPP, or a proposed transfer of assets from a SEPP to a JSPP, the Regulation requires a standard notice about the SEPP (Schedule 1) and a standard notice about the JSPP (Schedule 2) to be provided to each member of the SEPP.  Similarly, the Regulation requires a standard notice about the SEPP (Schedule 4) and a standard notice about the JSPP (Schedule 5) to be provided to a deferred member, a retired member and every other person entitled to benefits under the SEPP.  To ensure each such person clearly understands what he or she is giving up under the SEPP and what he or she will be receiving under the JSPP, Schedules 1 and 2 cannot be combined into a single notice. Similarly, Schedules 4 and 5 cannot be combined into a single notice.  Further, the content in each notice should closely follow the wording in the Schedules, particularly where the Schedules require that a particular statement be made.
 
 
Q11.  Can the information in the notices be prepared at more than one date?  What date may the information in the standard notices be prepared at?
 
A11.  No. The information in the standard notices, the standard statement and consent forms and the standard statement and objection forms may not be prepared at more than one date.  Rather, the information in these notices must be prepared as of the same date, which cannot be earlier than six months before the day on which the notices and statements are given. The schedules require that the notices include the date as of which the information was prepared, a statement that the information in the notice is current only to the date as of which the information was prepared and that the values contained in the notice may change between the preparation date and the effective date of the proposed transfer of assets under section 80.4 of the Pension Benefits Act (PBA) or the proposed conversion under section 81.0.1 of the PBA.  For more information, see subsection 5(7) of the Regulation and the schedules under the Regulation. 
 
 
Q12. Is it permissible for additional information to be provided in the statutory notice?
 
A12.  No. The standard notices, standard statements and consent forms and standard statement and objection forms must contain only the information required under the PBA and the Regulation.  Additional information may be provided in a document that is separate and distinct from the required notices.  Some examples of information that should not be part of statutory notices include (1) information that is not prepared as of the same date as the information in the statutory notices (such as scenarios involving the projection of service), (2) information regarding the advantages of a conversion or asset transfer, and (3) information regarding the views of unions or advisory groups.  When provided in a separate, distinct document, additional information may be included in the same mailing as the statutory notices.
 
 
Q13.  If a JSPP is also replicating benefits for active members transferred from the SEPP, can the standard notice about the JSPP simply state that the benefits are replicated without providing any specifics?
 
A13.  No.  All notices must be prepared in accordance with the requirements of the schedules under the Regulation. To ensure that members, deferred members, retired members and other persons entitled to benefits under the SEPP are making an informed decision to consent or to object to the proposed conversion or asset transfer, they need to be able to clearly identify what they are giving up under the SEPP and what they will be receiving under the JSPP.  In order to do so, they need to be able to compare information such as the years of service accrued and credited, the normal retirement date, the earliest unreduced retirement date, and the estimated annual amount of pension benefit at these dates.

Amendments to the SEPP and the JSPP

 

Q100. The Regulation requires that copies of proposed amendments to the SEPP and JSPP be submitted with the application to the Superintendent for consent to the proposed asset transfer.  What are the Superintendent's expectations with respect to these proposed amendments?

 

A100. Where there is an application for a transfer of assets and liabilities from a SEPP to a JSPP under section 80.4 of the PBA, amendments to the SEPP and the JSPP are required to implement the transfer.  The particular amendments may depend on the particular transfer including whether the effective date will be before or after the Superintendent consents.  However, we would expect the SEPP to be amended to provide for the transfer of assets and liabilities from the SEPP to the JSPP as at the effective date of the proposed asset transfer, subject to receiving the prior consent of the Superintendent.  In addition, we would expect the JSPP to be amended to accept the transfer of assets from the SEPP, assume the pension liabilities of the SEPP and permit the SEPP employer to become a participating employer under the JSPP, all as at the proposed effective date of the asset transfer.


The application for the S​uperintendent’s consent (Schedule 10 of the Regulation) must include amendments proposed to be made to both plans.  We will review the proposed amendments to ensure that the criteria for Superintendent consent to the proposed transfer have been met.  Should the Superintendent determine that such criteria are met, subject to the adoption of the amendments and their filing along with Form 1.1 (Application for Registration of a Pension Plan Amendment) in accordance with section 12 of the PBA, the Superintendent will indicate to the applicant that he intends to consent to the transfer subject to the filing of such amendments.


Section 80.4 of the PBA relates to the transfer of assets and accrued liabilities. Superintendent consent is not required in order for accrual of future-service benefits to cease under the SEPP and commence under the JSPP.  However, amendments must be made to the SEPP to provide for the cessation of accrual and to the JSPP to provide for the commencement of accrual. These amendments must be filed with FSCO.  Provided that the amendment to the SEPP to cease accrual is adopted and filed prior to the cessation of accrual, it will not be a void amendment.  However, it will be an adverse amendment, such that notice must be provided to members in accordance with section 26 of the PBA. This notice may be provided with the notices to members of the SEPP required to be made under section 80.4 of the PBA and section 5 of the Regulation.

Form of Superintendent Consent


Q200.  What form and method would the Superintendent’s consent to the proposed asset transfer under section 80.4 of the PBA be provided in?

A200.  Where the Superintendent is satisfied that the requirements of the PBA and the Regulation have been met subject to the adoption of the proposed  amendments submitted as part of the application and subject to the filing of such amendments, the Superintendent will issue a notice of intended decision (NOID) to consent to the proposed asset transfer. The NOID will be issued to the SEPP employer/administrator and the JSPP administrator, with a copy to the union(s) (if any) under the SEPP.  The Superintendent will require that the notice be communicated to the affected plan beneficiaries under both plans. The Superintendent may permit such communications to be provided through a plan website posting.  In accordance with subsection 89(6) of the PBA, the NOID will indicate that a person objecting to the proposed asset transfer is entitled to a hearing before the Financial Services Tribunal (FST), provided that a written notice requesting a hearing is delivered to the FST within 30 days after service of the NOID on that person.  If no written request for a hearing is made within 30 days, and the final amendments to the SEPP and the JSPP and Forms 1.1 have been filed with FSCO, the Superintendent will issue a written decision consenting to the proposed asset transfer.  ​

2017 Fourth Quarter - Estimated Solvency Funded Status of Defined Benefit Plans in Ontario

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