Public Service Alliance of Canada Pension Plan - September 26, 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 revoke the registration of an amendment to the Public Service Alliance of Canada Pension Plan, Registration Number 0512624 pursuant to section 18(1)(e) of the PBA  

 

 

TO:                

Public Service Alliance of Canada
233 Gilmour Street, Suite 1100
Ottawa, ON
K2P 0P1

Attention: John Gordon
National President                                           

 


NOTICE OF PROPOSAL

 

I PROPOSE TO REVOKE THE REGISTRATION OF AN AMENDMENT to the Public Service Alliance of Canada Pension Plan, Registration Number 0512624, (the “Plan”) pursuant to section 18(1)(e) of the PBA.

 

REASONS:

  1. The Department of Veterans’ Affairs Component of the Public Service Alliance of Canada (“DVAC”)  entered into an agreement with the Public Service Alliance of Canada Centre (“PSAC”) for the transfer of its employees and their pension plan (the Pension Plan for Employees of Department of Veterans’ Affairs Component of the Public Service Alliance of Canada, the “DVAC Plan”) assets to the Pension Plan of the Public Service Alliance of Canada, now known as the Pension Plan for Employees of the Public Service Alliance of Canada (the “PSAC Plan”), effective July 1, 1987 (the “Asset Transfer Date”).

  2. Both the DVAC Plan and the PSAC Plan were amended to facilitate this transfer of assets. On the Asset Transfer Date, the assets were segregated into:

    i) an amount equal to the actuarial liabilities in respect of members’ benefits; and

    ii) the “remaining” or surplus funds (the “Surplus”).

  3. The terms of the transfer agreement provided that the assets in (i) and (ii) were to be transferred separately from the DVAC Plan which was funded under a contract of insurance, to the PSAC Plan which is funded under a trust agreement. The amendments made to the DVAC Plan and the PSAC Plan in order to facilitate the transfer of assets to the PSAC Plan required that the Surplus be transferred separately to the PSAC Plan accordingly and that it be held in trust for “the exclusive benefit of the member employees of the Department of Veterans’ Affairs Component of the Public Service Alliance of Canada and their beneficiaries” and be credited with interest based on the fund earnings of the PSAC Plan.

  4. The Surplus was accounted for separately from the other assets of the PSAC Plan. Interest was accrued and added to its account. No assets were added to the Surplus based on contributions made by or on behalf of members who joined the DVAC component of the PSAC Plan after the Asset Transfer Date. Amendment No. 14 to the PSAC Plan specifically provided that the Surplus was for the “exclusive benefit” of the member employees of the DVAC component of the Public Service Alliance of Canada and their beneficiaries, in accordance with Appendix “C” of the amendment. Appendix “C” applied only to “…Plan Members currently accruing Creditable Service, or who have accrued Creditable Service, in respect of employment with the Department of Veteran’s Affairs Component of the Public Service Alliance of Canada”.

  5. The Surplus was therefore impressed with a trust for the benefit of the members of the DVAC Plan on the Asset Transfer Date and the class of beneficiaries entitled to the Surplus was closed at that time. Members who joined the DVAC component of the PSAC Plan after the Asset Transfer Date are excluded from the class of members entitled to the Surplus accordingly.

  6. Effective January 1, 2006, PSAC amended the PSAC Plan through Amendment 2006-3, in order to distribute the Surplus to the plan members of the DVAC or UVAE* Component of the PSAC Plan. This amendment proposes to distribute 1/3 of the Surplus to those members who were members of the DVAC Plan on the Asset Transfer Date and to distribute the remaining 2/3 of the Surplus to members of the DVAC component of the PSAC Plan who joined the DVAC component after the Asset Transfer Date. Amendment 2006-3 was filed in April of 2006 and FSCO sent out a Notice of Registration on April 20th, 2006.

  7. Amendment 2006-3 is contrary to the terms of the filed amendments to the PSAC Plan and the DVAC Plan that provided for the transfer of assets from the DVAC Plan to the PSAC Plan and set aside the Surplus for the benefit of the members of the DVAC Plan on the Asset Transfer Date.

  8. Section 19(3)(a) of the PBA requires the administrator of a pension plan to ensure that the pension plan and the pension fund are administered in accordance with the filed documents in respect of which the Superintendent has issued an acknowledgement of application for registration or a certificate of registration, whichever is issued later and the filed documents in respect of an amendment to the pension plan, if the application complies with this Act and the regulations and the amendment is not void under this Act.

  9. Section 18(1)(e) of the PBA grants the Superintendent the authority to revoke the registration of an amendment that does not comply with the PBA and the regulations.

  10. 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 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.

 

 

DATED at Toronto, Ontario, this 26th day of September, 2007

 

 


_______________________________                          

K. David Gordon
Deputy Superintendent, Pensions

 

 

Copy to:

Union of Veterans’ Affairs Employees
233 Gilmour Street, Suite 703
Ottawa, Ontario
K2P 0P2

Attention: Yvan Thauvette
President National

And to:

Sack, Goldblatt, Mitchell LLP
500-30 Metcalfe St.
Ottawa, Ontario
K1P 5L4

Attention: Fiona Campbell


* Now the “Union of Veterans’ Affairs Employees component” under the Plan in reference to Plan members who work for the Department of Veterans Affairs.

** 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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