Joint Retirement Board for Conservative Judaism - April 13, 2007

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 Make an Order under sections 42 and 87 of the PBA in respect of  the Joint Retirement Board for Conservative Judaism, Registration Number 0307645.




One Penn Plaza
Suite 1515
New York, NY
U.S.A. 10119



Mitchell Smilowitz, Chief Operating Officer
Administrator of the Plan



AND TO:       

17 Tova Place
Thornhill, Ontario
L4J 8C4



                                               NOTICE OF PROPOSAL


I PROPOSE TO MAKE AN ORDER under sections 42 and 87 of the PBA, to require the Joint Retirement Board for Conservative Judaism (the “Board”) to transfer the sum of $118,382.13 plus interest from December 31, 2004, as well as interest on the sum of $276,224.96 from December 31, 2004 to January 1, 2007, to the Locked-In Retirement Account number 548352908 held with RBC Financial Group located at 1136 Centre Street, Thornhill, Ontario, in the name of Paul Kowarsky.



  1. The Board is the administrator of the Joint Retirement Board for Conservative Judaism, Registration Number 0307645 (the “Plan”), which is a multi-employer pension plan.

  2. Paul Kowarsky (“Mr. Kowarsky”) is a former member of the Plan who was employed by Beth Tzedec Congregation (the “Employer”), a participating employer in the Plan.  At all material times, Mr. Kowarsky was employed in Ontario.

  3. Mr. Kowarsky terminated his employment with the Employer on or about May 1, 2001.   He was entitled to a deferred pension under the terms of the Plan at that time.

  4. The Plan states in section 3.1 that an Individual Account shall be maintained for each participant for deposits received on the participant’s behalf.

  5. Section 5.11 of the Plan states that each Participant is the sole and exclusive owner of his Individual Account.

  6. Mr. Kowarsky received a memorandum from the Employer on or about December 24, 2004 advising that he was required to transfer his account balance of approximately  $386,886.39 as at December 31, 2004, to a Canadian RRSP.

  7. Mr. Kowarsky advised the Employer to transfer his funds to his Canadian RRSP by letter dated August 16, 2005.

  8. On or about September 6, 2005 Mr. Kowarsky received a cheque in the amount of $276,224.96, and was advised that the remaining 30% of his Individual Account, or $118,382.13, had been transferred to the Internal Revenue Service, the U.S. taxation authority.

  9. Between September, 2005 and December, 2005 Mr. Kowarsky and his personal representative attempted to have the transaction reversed and his entire account balance transferred to his Canadian RRSP.

  10. On December 21, 2005 Mr. Kowarsky’s personal representative contacted the Financial Services Commission of Ontario for assistance.

  11. Mr. Kowarsky did not cash the cheque, it subsequently became stale dated, and he returned it to the Employer on January 4, 2007.

  12. On or about September 20, 2006, Mr. Kowarsky directed the administrator of the Plan to transfer the funds in his Individual Account in the Plan to his Registered Retirement Savings Plan number 548352897 (the “LIRA”) with the RBC Financial Group located at 1136 Centre Street, Thornhill, Ontario.

  13. The administrator of the Plan transferred the sum of $276,224.90 U.S. to the LIRA in January, 2007.  This represented 70% of Mr. Kowarsky’s Individual Account.

  14. The administrator of the Plan had no authority to transfer any funds from Mr. Kowarsky’s Individual Account to the U.S. taxation authority.  Mr. Kowarsky’s employment was entirely in Ontario, Canada during his participation in the Plan.

  15. Section 42 of the PBA states in part:

    42(1)  A former member of a pension plan who, on or after the 1st day of January, 1988, terminates employment or ceases to be a member of the pension plan and who is entitled to a deferred pension is entitled to require the administrator to pay an amount equal to the commuted value of the deferred pension,


    • into a prescribed retirement savings arrangement.
    • Subject to compliance with the requirements of this section and the regulations, the administrator shall comply with the direction within the prescribed period of time after delivery of the direction. 

  16. The administrator of the Plan did not comply with section 42 of the PBA because one third of the funds in Mr. Kowarsky’s Individual Account was transferred to the U.S. tax authorities rather than to Mr. Kowarsky’s LIRA pursuant to his direction to the Plan administrator.

  17. Section 87 of the PBA states in part:

    87(1)  The Superintendent, in the circumstances mentioned in subsection (2) and subject to section 89 (hearing and appeal), by a written order may require an administrator or any other person to take or to refrain from taking any action in respect of a pension plan or a pension fund.     

    (2)  The Superintendent may make an order under this section if the Superintendent is of the opinion, upon reasonable and probable grounds,  

    (a) that the pension plan or pension fund is not being administered in accordance with this Act, the regulations or the pension plan;

    (b) that the administrator of the pension plan, the employer or  the other person is contravening a requirement of this Act or the regulations.  

  18. The administrator of the Plan is not administering the pension plan or pension fund in accordance with the PBA or the Plan, and is contravening a requirement of the PBA by failing to transfer the full amount of Mr. Kowarsky’s Individual Account to his LIRA and by transferring one-third of that amount to the U.S. taxation authorities when Mr. Kowarsky was never employed in the United States.

  19. Such further and other 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
14th Floor
Toronto, Ontario
M2N 6L9


Attention:  The Registrar



FOR FURTHER INFORMATION on a Form for the written notice, please see the Tribunal website at or contact the Registrar of the Tribunal by phone at 416-226-7752, toll free at 1-800-668-0218, ext. 7752, or by fax at 416-226-7750.


DATED at Toronto, Ontario, this 13th 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.

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