Aluminum Brick Glassworkers - April 6, 2006

IN THE MATTER OF the Pension Benefits Act R.S.O. 1990, c. P.8, as amended (the “Act”)

AND IN THE MATTER OF a Notice of Proposal issued by the Superintendent of Financial Services to order the return of assets to the Pension Plan for the Aluminum Brick and Glass Workers International Union Retirement & Pension Plan Registration No.0009838 from the United Steel Workers of America (International Union) Staff Pension Plan Registration No. 0008964 under section 81(6) of the Act;

AND IN THE MATTER OF a Notice of Proposal issued by the Superintendent of Financial Services to order the filing of a report on the actuarial valuation of the assets transferred from the Pension Plan for the Aluminum Brick and Glass Workers International Union Retirement & Pension Plan Registration No.0009838 to the United Steel Workers of America(International Union) Staff Pension Plan Registration No. 0008964;

AND IN THE MATTER OF a Notice of Proposal issued by the Superintendent of Financial Services to order the filing of the Financial Statements, Annual Information Returns, Pension Benefits Guarantee Fund assessment certificates and Financial Statements for the Pension Plan for the Aluminum Brick and Glass Workers International Union Retirement & Pension Plan Registration No.0009838 under the Act and Regulation 909 R.R.O. 1990.

TO:

Aluminum Brick Glassworkers
3362, Hollenberg Dr.,
Bridgeton USA, MO 63044-2477

Attention:

Mr John Murphy
Director

AND TO:

Sack Goldblatt Mitchell LLP
20 Dundas Street West,
Suite 1130, P.O. Box 180
Toronto, Ontario M5G 2G8

Attorneys at law for United Steel Workers
of America International Union


NOTICE OF PROPOSALS

I PROPOSE TO:

  1. ORDER that the administrator of the Aluminum Brick and Glass Workers International Union Retirement & Pension Plan Registration No.0009838 ( the “ABG Plan”) file a report on the actuarial valuation for the assets transferred from the ABG Plan to the United Steel Workers of America (International Union) Staff Pension Plan Registration No. 0008964 (“USWA Staff Plan”) within 90 days from the date of this proposal.

  2. ORDER THAT the assets transferred from the ABG Plan to the USWA Staff Plan be returned to the ABG Plan together with the accrued interest within 90 days from the date of this proposal pursuant to section 81(6) of the Act; and

  3. ORDER THAT the Financial Statements due September 30, 2001, September 30, 2002, September 30, 2003, September 30, 2004 and September 30, 2005 ; the Annual Information Returns due at December 31, 2001, December 31, 2002, December 31, 2003, December 31, 2004 and December 30, 2005; the Pension Benefits Guarantee Fund assessment certificates due December 31, 2001, December 31, 2002, December 31, 2003, December 31, 2004, December 31, 2005; and the Actuarial Reports due January 1, 2001 and January 1, 2004, be filed within 90 days from the date of this proposal.

REASONS FOR THE PROPOSALS:

  1. The ABG Plan is a defined benefit plan. It was submitted for registration with the predecessor of the Financial Services Commission of Ontario (“FSCO”) in 1967, effective July 28, 1964. The ABG Plan was registered with Canada Customs and Revenue Agency (“CRA”) effective January 28, 1964, however, it is now listed by CRA as having been abandoned. Prior to April 1, 2000 the Plan complied with the various filing requirements (including the Annual Information Returns, Financial Statements, Pension Benefits Guarantee Fund assessment certificates and Actuarial Reports) under the Act.

  2. Effective January 19, 1997, Aluminum Brick and Glass Workers Union (“ABGWU”) merged with the United Steelworkers Union of America International Union (“USWA”) and became part of USWA. Both unions at the time of the merger maintained separate pension plans, the ABG Plan and the USWA Staff Plan respectively. The active members of ABGWU became employees of USWA as of the merger date, and also became members of the USWA Staff Plan for the accrual of future service credits only. The USWA Staff Plan has members in other provinces in Canada in addition to Ontario.

  3. The assets of the trust funds of both the ABG Plan and the USWA Staff Plan are situated and maintained in the United States of America (“U.S.A.”) The trustees of both pension plans are located in the U.S.A. and are subject to the laws of the U.S.A.

  4. By a resolution dated March 9, 2000, the USWA and the Trustees of the ABG Plan agreed to merge the ABG Plan with the USWA Staff Plan effective April 1, 2000. At the time of the merger of the plans, the trust funds of both plans were subject to regulation in the U.S.A., under the Employee Retirement Income Security Act (“ERISA”) and the Internal Revenue Code (“IRC”). The merger of the plans was approved in the U.S.A. by the IRC by determination letter dated July 25, 2002.

  5. No application was made to the Superintendent for consent to the merger of the ABG Plan and the USWA Staff Plan.

  6. FSCO wrote the administrator of the ABG Plan in relation to its delinquency in filing the Actuarial Reports, Annual Information Returns, Pension Benefits Guarantee Fund assessments certificates, Financial Statements and the submission of the relevant documents in relation to the merger of the ABG Plan with the USWA Staff Plan in compliance with the requirements under the Act and FSCO Policy No. A700-251 concerning the full transfer of assets from one pension plan to another.

  7. In response to FSCO’s request, the lawyers for the USWA, by letter dated March 10, 2004, submitted that FSCO has no jurisdiction over the trust funds and consequently has no jurisdiction over any asset transfer between the two trust funds of the ABG Plan and the USWA Staff Plan for the following reasons: the transfer was between two foreign trust funds; neither of the pension plans were registered with CRA; both pension plans qualify as foreign unregistered plans for the purposes of CRA; and all the assets of the trust funds of both plans were situated in the U.S.A. at the time of the merger and continue to be held outside of Canada.

  8. The Superintendent’s authority to regulate a pension plan is set out in section 3 of the Act. Under section 3, that authority is determined by whether or not a plan member is employed in Ontario and the plan falls within the definition of a “pension plan” for the purposes of the Act.

  9. The concept of the “place of employment” is set out in section 4 of the Act which provides as follows:

    4—(1) For the purposes of this Act, a person shall be deemed to be employed in the province in which the establishment of his or her employer is located and to which the person is required to report to work

    (2) A person who is not required to report for work at an establishment of his or her employer shall be deemed to be employed in the province in which is located the establishment of his or her employer from which the person’s remuneration is paid.

  10. It has not been established in this case that the members of the ABG Plan are not employed in Ontario for the purposes of the Act.

  11. A “pension plan” is defined in section 1 of the Act as a plan organized and administered to provide pensions for employees and sets out a list of plans that are exempted from the Act. Pension plans that are registered under the Act and also registered in foreign jurisdiction are not exempted from the Act. The fact that the ABG Plan is also registered in the U.S. does not exempt it from the provisions of the Act. As indicated above, the ABG plan has been registered under the Act since 1967 and all the relevant filings were done prior to April 1, 2000.

  12. Section 80(4) or 81(4) of the Act provides that no transfer of assets shall be made from one pension fund to another pension fund without the prior consent of the Superintendent. Financial Services Commission of Ontario Policy A700-251 ( “FSCO Policy”) requires that a formal application be made for the Superintendent’s consent. It also sets out the necessary documents, including an actuarial valuation report, that must be submitted in support of the application and stipulates the guidelines the Superintendent will follow in determining whether to consent to the transfers of assets from one pension fund to another.

  13. No application was submitted on behalf of the ABG Plan for the Superintendent’s consent for the transfer of assets from the ABG Plan to the USWA Staff Plan. The pension fund of the ABG Plan was therefore, transferred to the pension fund of the USWA Staff Plan without the consent of the Superintendent in contravention of section 81(4) of the Act and FSCO Policy A 700-251.

  14. Under section 81(6) of the Act the Superintendent by order may require a transferee to return to the pension fund assets, with interest, transferred without the prior consent of the Superintendent. Since the assets were transferred from the ABG Plan to the USWA Staff Plan without the consent of the Superintendent, the Superintendent has the authority to order a return of the assets with interest to the ABG Plan fund.

  15. Since April 1, 2000 no financial statements, actuarial reports, Pension Benefits Guarantee Fund assessment certificates, or annual information returns have been filed with FSCO in relation to the ABG Plan.

  16. Under section 76(1) Regulation 909, RRO 1990 (the “Regulation”), a pension plan is required to file a financial statement for the pension fund no later than 6 months after the end of a plan’s fiscal year. The ABG Plan has not filed financial statements for the following periods: April 1, 2000 to March, 31, 2001; April 1, 2001 to March, 31, 2002; April 1, 2002 to March, 31, 2003, April 1, 2003 to March, 31, 2004 and April 1, 2004 to March, 31, 2005 at the due dates as required by the Regulation.

  17. Under section 20 of the Act and section 18(1) of the Regulation a pension plan is required to file an annual information return no later than 9 months after the end of a plan’s fiscal year. The ABG Plan has not filed annual information for the following periods: April 1, 2000 to March, 31, 2001; April 1, 2001 to March, 31, 2002; April 1, 2002 to March, 31, 2003, April 1, 2003 to March, 31, 2004 and April 1, 2004 to March, 31, 2005 on the due dates as required by the Regulation.

  18. Pursuant to section 18(7) of the Regulation an administrator is required to file, as an attachment to the annual information return, a Pension Benefits Guarantee Fund assessment certificate. The ABG Plan has not filed Pension Benefits Guarantee Fund certificates for the following periods: April 1, 2000 to March, 31, 2001; April 1, 2001 to March, 31, 2002; April 1, 2002 to March, 31, 2003, April 1, 2003 to March, 31, 2004 and April 1, 2004 to March, 31, 2005 on the due dates as required by the Regulation.

  19. Under section 14(10) of the Regulation the administrator of a pension plan shall file an actuarial valuation report required under the Regulations within 9 months of the valuation date. No actuarial report has been filed in respect of the ABG Plan for the period April 1, 2000, to March 31, 2003 as required by the Regulation.

  20. Therefore the Superintendent proposes to order the administrator of the ABG Plan to:
  1. file a report on the actuarial valuation in respect of the transfer of assets from the ABG Plan to the USWA Staff Plan within 90 days from the date of this proposal;
  2. return the assets transferred from the ABG Plan to the USWA Staff Plan with interest pursuant to section 81(6) of the Act within 90 days from the date of this proposal; and
  3. file the Financial Statements, the Actuarial Report, Pension Benefit Fund assessment certificates and Annual Information Returns for the periods stipulated above, within 90 days form the date of this proposal.
  1. Such further and other reasons as may come to my attention.

YOU ARE ENTITLED TO A HEARING before the Financial Services Tribunal (the “Tribunal”) pursuant to subsection 89(6) of the Act. To request a hearing, you must deliver to the Tribunal a written notice that you require a hearing, within thirty (30) days after this Notice of Proposal is served on you.

YOUR WRITTEN NOTICE must be delivered to:

Financial Services Tribunal
5160 Yonge Street, 14th Floor
North York, Ontario
M2N 6L9

Attention: The Registrar

For further information, contact the Registrar of the Tribunal by phone at 416-226-7752, or toll free at 1-800-668-0128, ext. 7752, or by fax at 416-226-7750.

IF YOU FAIL TO REQUEST A HEARING WITHIN THIRTY (30) DAYS, I MAY REFUSE TO CONSENT TO THE TRANSFER OF ASSETS AND I MAY REFUSE TO REGISTER THE AMENDMENT, AS PROPOSED IN THIS NOTICE OF PROPOSAL.

DATED at Toronto, Ontario, April 6, 2006.


K. David Gordon

Deputy Superintendent, Pensions

 

*NOTE—PURSUANT to section 112 of the Act any notice, order or other document is sufficiently given, served, or delivered if delivered personally or sent by first class mail and any document sent by first class mail shall be deemed to be given, served, or delivered on the seventh day after mailing.

 
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