IN THE MATTER OF the Pension Benefits Act, R.S.O. 1990, c. P.8, as amended (the “PBA”)
AND IN THE MATTER OF a Proposal of the Superintendent of Financial Services to Refuse to Make an Order under section 87 of the PBA respecting a request by Mr. Jan Szarycz relating to the Canadian Commercial Workers Industrial Pension Plan, Registration Number 0580431.
Mr. Jan Szarycz
3488 Fieldgate Dr.
Canadian Commercial Workers Industrial Pension Plan
61 International Blvd., Suite 110
Ms. Carol Ann Power
Administrator, Toronto Regional Office
Employer and Administrator
NOTICE OF PROPOSAL
I PROPOSE TO REFUSE TO MAKE AN ORDER in respect of the Canadian Commercial Workers Industrial Pension Plan (the “Plan”) requiring the administrator of the Plan to transfer the commuted value of Mr. Szarycz’s pension benefit to a Locked-In Retirement Account (LIRA), Life-Income Fund (LIF) or a Locked-In Retirement Income Fund (LRIF) or requiring the administrator of the Plan to provide payment to Mr. Szarycz of the commuted value of his pension benefit, pursuant to sections 42, 50, 67 and 87 of the PBA.
- Mr. Szarycz is a former employee of Group 4 Falck (Canada) Ltd.
- Group 4 Falck ceased to be a participating employer under the Plan effective September 30, 2004.
- Section 42(1) of the PBA states that a member of a pension plan who terminates on or after January 1, 1988, and is entitled to a deferred pension under the pension plan, is entitled to require the administrator to pay an amount equal to the commuted value of the deferred pension to the pension fund related to another pension plan, into a prescribed retirement savings arrangement or for the purchase for the former member of a life annuity. However, section 42(3) of the PBA states that section 42(1) of the PBA does not apply to a former member whose employment is terminated and who is entitled to an immediate payment of a pension benefit under the pension plan unless the pension plan permits the transfer.
- Section 8.05 of the Plan provides for the payment of an immediate monthly pension at age 50 or older. The Plan does not permit any of the transfer options. Mr. Szarycz was over 50 years old in the year that he terminated employment. Therefore, he is not entitled to the transfer options under section 42(1) of the PBA.
- Section 50(1) of the PBA states that a pension plan may provide for payment to a former member of the commuted value of the pension benefit if the annual pension benefit payable at the normal retirement date is not more than 2 per cent of the Year’s Maximum Pensionable Earnings, as defined under the Canada Pension Plan (YMPE), in the year that the former member terminated employment. The YMPE in 2006 was $42,100.00, 2 per cent of $42,100.00 is $842.00 annually or $70.17 monthly. Mr. Szarycz’s monthly pension benefit is $72.27 which is greater than the calculated 2 per cent limit amount of $70.17. Therefore, Mr. Szarycz does not qualify for payment of the commuted value of the pension benefit under section 50(1) of the PBA.
- Section 67(5) of the PBA states that the Superintendent of Financial Services may consent to the commutation or surrender, in whole or part, of a prescribed retirement savings arrangement if the Superintendent is satisfied as to the existence of such circumstances of financial hardship as may be prescribed. Section 84 of Regulation 909, R.R.O. 1990 states that the following prescribed retirement savings arrangements are prescribed for the purposes of section 67(5): 1. A life income fund. 2. A locked-in retirement account. 3. A locked-in retirement income fund. In this case, the Superintendent cannot consent to the commutation of Mr. Szarycz’s pension benefit because his pension monies remain in the Plan and have not been transferred to a life income fund, a locked-in retirement account or a locked-in retirement income fund. Accordingly, the Superintendent is not able to consent to the commutation of Mr. Szarycz’s pension benefit on the basis of financial hardship.
- Such further reasons as may come to my attention.
YOU ARE ENTITLED TO A HEARING by the Financial Services Tribunal (the “Tribunal”) pursuant to section 89(6) of the PBA. 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
Attention: The Registrar
FOR FURTHER INFORMATION on a Form for the written notice, please see the Tribunal website at www.fstontario.ca or contact the Registrar of the Tribunal by phone at 416- 590-7294, toll free at 1-800-668-0128, ext. 7294, or by fax at 416-226-7750.
IF YOU FAIL TO REQUEST A HEARING WITHIN THIRTY (30) DAYS, I MAY CARRY OUT THE PROPOSED REFUSAL AS DESCRIBED IN THIS NOTICE.
DATED at Toronto, Ontario, this 18th day of April , 2007.
K. David Gordon
Deputy Superintendent, Pensions
* NOTE - Pursuant to section 112 of the PBA any Notice, Order or other document is sufficiently given, served or delivered if delivered personally or sent by regular mail and any document sent by regular mail shall be deemed to be given, served or delivered on the seventh day after the date of mailing.