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 69(1)(b), (d) and (e), 55(2), and 87(2)(c) of the PBA that the Northern Breweries Ltd. and Doran’s Beverages Inc. Wage Rate Employees’ Pension Plan, Registration Number 0210872, be wound up and that all outstanding contributions be remitted to the Plan.
Northern Breweries Ltd.
503 Bay Street
Sault Ste. Marie, Ontario
Attention: Leo Schotte, Chairman
Employer and Administrator of the Plan
NOTICE OF PROPOSAL
I PROPOSE TO MAKE AN ORDER under sections 69(1)(b), (d) and
(e), 55(2)and 87(2)(c) of the PBA, that the Northern Breweries Ltd. and Doran’s Beverages Inc. Wage Rate Employees’ Pension Plan, Registration Number 0210872 (the “Plan”), be wound up effective as at June 30, 2006, and that all outstanding contributions be remitted to the Plan.
- Northern Breweries Ltd. (“Northern”) is the employer and administrator for the Plan.
- The Plan is a single employer, defined benefit, non-contributory pension plan with a fiscal year end of December 31st.
- All of the members of the Plan who were employed at Northern’s Sudbury and Sault Ste. Marie locations were laid off from their employment with Northern effective June 30, 2006. Northern closed both of these locations on the same date.
- Northern failed to make employer normal cost contributions to the Plan commencing with the contributions due in June 2005.
- Northern also failed to make special payments owing to the Plan to satisfy a solvency deficiency of $313,370 estimated by its actuary as at June 23, 2006.
- The Plan provides in Article 4 that Northern shall make contributions for deposit in the Plan fund as required based on the advice of the Plan’s actuary, to provide the normal cost of the benefits currently accruing and to provide for the proper amortization of any unfunded liability or solvency deficiency. The contributions with respect to normal cost shall be deposited within thirty days following the calendar month for which the contributions are payable. The contributions with respect to the amortization of any going concern actuarial liability or solvency deficiency shall be deposited in equal monthly instalments in each Plan Year over a total period not in excess of the maximum amortization period permitted by the PBA.
- The PBA states the following with respect to the wind up of a pension plan:
69(1) The Superintendent by order may require the wind up of a pension plan in whole or in part if,
(b) the employer fails to make contributions to the pension fund as required by this Act or the regulations;
(d) a significant number of members of the pension plan cease to be employed by the employer as a result of the discontinuance of all or part of the business of the employer or as a result of the reorganization of the business of the employer;
(e) all or a significant portion of the business carried on by the employer at a specific location is discontinued.
- The PBA states the following with respect to employer contributions:
55(2) An employer required to make contributions under a pension plan, or a person or entity required to make contributions under a pension plan on behalf of an employer, shall make the contributions in accordance with the prescribed requirements for funding and shall make thecontributions in the prescribed manner and at the prescribed times.
- The Regulation prescribes as follows:
4(4) The payments referred to in subsections (2) and (2.4) shall be made by the employer or, if a person or entity is required to make contributions on behalf of the employer, by that person or entity and, if applicable, by the member of the pension plan within the following time limits:
3. In the case of a pension plan that provides defined benefits, employer contributions in respect of the normal costs reported under clause 13(1)(a) or 14(7)(a) for each period covered by a report beginning on or after the 1st day of January, 1988, in monthly instalments within thirty days after the month for which contributions are payable, the amount of the instalments to be either a total fixed dollar amount, a fixed dollar amount for each employee or member of the plan or a fixed percentage either of the portion of the payroll related to members of the plan or of employee contributions.
- The Regulation further prescribes in section 5 that special payments required to liquidate a solvency deficiency shall be paid, with interest, by equal monthly instalments over a five-year period beginning on the valuation date of the report in which the solvency deficiency was determined.
- The PBA states in section 87(2)(c) that the Superintendent may require the administrator or employer of a pension plan to take any action in respect of the pension plan if the Superintendent is of the opinion, upon reasonable and probable grounds, that the administrator or employer is contravening a requirement of the PBA or the Regulation.
- Northern has not made any contributions to the Plan as required by the PBA and as prescribed by the Regulation since June 30, 2006. Therefore, there are grounds to wind up the Plan under section 69(1)(b) of the PBA.
- A significant number of members of the Plan ceased to be employed by Northern as at June 30, 2006, as a result of the discontinuance of all or part of Northern’s business or as a result of the reorganization of Northern’s business. Therefore, there are grounds to wind up the Plan under section 69(1)(d) of the PBA.
- All or a significant portion of Northern’s business located at Sudbury and at Sault Ste. Marie, Ontario, was discontinued as at June 30, 2006. Therefore, there are grounds to wind up the Plan under section 69(1)(e) of the PBA.
- 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
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 PROPOSAL AS DESCRIBED IN THIS NOTICE.
THE ADMINISTRATOR IS REQUIRED pursuant to section 89(5) of the PBA to transmit a copy of this Notice of Proposal to the following persons: All members and former members of the Plan who ceased to be employed by Northern as at June 30, 2006; SEIU Local 2 Brewery, General and Professional Workers Union; all other persons who are entitled to payment from the Plan.
DATED at Toronto, Ontario, this 27th day of June, 2008
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.