Pension Plan for Employees of Loba Limited - January 5, 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 Proposal of the Superintendent of Financial Services to Make an Order under section 69 of the Act respecting the Pension Plan for Employees of Loba Limited, Registration Number 1026335 (the “Plan”);

TO:

Loba Limited
c/o Welton Parent Inc.
5310 Canotek Road, Suite 210
Ottawa ON K1J 9N5

Attention:

Sylvain Parent
President

NOTICE OF PROPOSAL

I PROPOSE TO MAKE AN ORDER in respect of the Plan under section 6 of the Act.

PROPOSED ORDER:
That the Plan be wound up in whole effective May 1, 2005

REASONS FOR THE ORDER:

  1. The Plan has been registered under the Act effective January 1, 1996. The Plan is sponsored and administered by Loba Limited (“Loba”).

  2. On April 11, 2005 the Deputy Superintendent, Pensions received a notice from the Canada Revenue Agency, Registered Plans Directorate, enclosing a notice sent to Loba advising that the Plan’s registration under subsection 147.1(12) of the Income Tax Act (Canada) had been revoked effective April 1, 2000. The reasons for the revocation were provided to the Plan in a notice of intent from the Canada Revenue Agency in a letter dated October 16, 2003, and were based on the Plan’s failure to comply with provisions under the Income Tax Act. An appeal of the Minister’s notice of intent by Loba to the Federal Court of Appeal was dismissed and application by Loba for Leave to Appeal to the Supreme Court of Canada was dismissed on April 7, 2005.

  3. On April 29, 2005, Loba submitted a resolution amending the Plan to suspend all member contributions to the pension plan effective May 1, 2005. The amendment was registered on November 21,2005. A covering letter from Welton Parent cites the revocation of the Plan’s registration under the Income Tax Act as the reason for the suspension of contributions.

  4. The registration of the Plan amendment suspending contributions of Loba and the Plan members is a cessation or suspension of employer contributions to the pension fund within the meaning of clause 69(1)(a) of the Act, and accordingly the Superintendent has the authority to order a wind up of the plan.

  5. There is no benefit to members in not winding up the Plan because the decision of Minister to revoke the registration of Plan under the Income Tax Act is a final determination and the Plan cannot again be registered. The stated reason for the suspension of contributions (the revocation of the Plan under the Income Tax Act) will be permanent. Therefore there is no basis for the Superintendent not to exercise his discretion not to order a wind up of the Plan.

  6. Such further reasons as may come to my attention.

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

YOUR WRITTEN NOTICE REQUIRING A HEARING must be delivered to:
Financial Services Tribunal
5160 Yonge Street, 14th Floor
North York ON M2N 6L9

Attention: The Registrar

FOR FURTHER INFORMATION, contact the Registrar of the Tribunal by phone at 416-226-7752, 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 MAKE THE ORDER PROPOSED IN THIS NOTICE.

DATED at Toronto, Ontario, this 5th day of January, 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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