This page is intended to provide plan administrators with answers to general pension questions that arise in their day to day pension activities. New questions and answers will be added as they arise.

The questions and answers are general in nature and may not apply to a specific pension plan because of the terms of the plan, the situation in question or other variables. Every effort has been made to provide clear and accurate responses. However, this information should not be relied on in all situations.

The plan administrator is ultimately responsible for his or her actions relating to the pension plan. Therefore, the plan administrator is encouraged to seek clarification of specific questions from its service providers or FSCO.

Questions related to a specific pension plan should be addressed to the Pension Officer responsible for that plan. This information is available through FSCO's Pension Plan Information Access. General questions not related to a specific pension plan may be directed to the Contact Centre.

General Questions from Pension Plan Administrators

Q: Can a pension plan allow a member who has not reached normal retirement age to elect to begin payment of his or her pension while he or she continues employment? 

A:  No.  A member who has not reached normal retirement age must terminate employment before payment of the pension begins.  However, a plan can provide that a member who continues employment beyond normal retirement age may choose to begin pension payments. 

Q:  I recently received a Pension Assessment invoice in the mail and have some questions.  Where can I get more information on the Pension Assessment?

A:  FSCO has created a Pension Assessment Frequently Asked Questions which answers some of the general questions related to the Pension Assessment.

Q: Does FSCO intend to update its position on asset transfers developed following the decision of the Ontario Court of Appeal in Transamerica in light of subsequent court decisions?

A: Whenever there is a court decision that may affect FSCO’s publicly stated position, FSCO staff analyzes the decision and determines whether or not FSCO’s position should be updated.

The decision of the Ontario Court of Appeal in Aegon Canada Inc. et al. v. ING Canada Inc et al. [2003], 179 O.A.C. 196 (Transamerica) had an impact on the manner in which FSCO reviewed applications for transfer of assets from one pension plan to another.  The decision confirmed that pension plans may be subject to trust provisions that restrict the capacity of an employer to transfer pension assets to another plan.  In such cases an analysis of all relevant trust and plan documentation must be carried out to determine if this is an issue  before the Superintendent may consent to an application under section 80 or 81 of the PBA.

FSCO recognizes that the jurisprudence in this area is complex and has been evolving.  FSCO has taken particular note of the Supreme Court of Canada decision in Buschau v. Rogers Communications Inc., [2006] 1 S.C.R. 973, which did review the role of trust law in the context of the statutory regulation of pension plans. In FSCO’s view, the judgment did not dispense with the requirement to consider trust issues in relation to asset transfers (see in particular paragraph 52 of the judgment).

As a result, FSCO does not believe that the case law to date has overruled or sufficiently distinguished Transamerica such that the Superintendent would be free to dispense with the requirement for a detailed trust analysis prior to consenting to an application under section 80 or 81 of the PBA where the assets of the relevant trust(s) are held for the exclusive benefit of the beneficiaries.

FSCO’s “Trust Issues on Plan Transfer/Merger” Checklist provides guidance for applicants to demonstrate how pension plans that have exclusive benefit trust language may validly transfer assets to another plan despite such restrictive language.

Q: When a pension plan winds up and the employer has funded the wind up deficit, can the employer apply for a refund of an overpayment of contributions under Section 78(4) of the Pension Benefits Act (the PBA)? 

A: When an employer funds a deficit on the wind up of the pension plan (either in whole or in part) and there are assets remaining after all of the benefits have been provided, there may have been an overpayment.  If so, the employer may make an application under section 78(4) of the PBA for a refund of an overpayment of contributions.

Such an application should include documentation clearly indicating the contributions paid into the pension fund to fund the wind up deficit and the amount of the overpayment being requested as a refund.

Upon review of the application, the Superintendent may consent to a refund equal to the lesser of:

• The assets remaining in the pension fund (or, in the case of a partial wind up, the assets remaining in the wound up portion of the pension fund) after all pension benefits related to the wind up have been settled, and
• The sum of all special payments made to the pension fund by the employer to fund the deficit under section 75, plus investment earnings thereon, from the date that the contributions were made to the date that the refund is paid to the employer.

Q: What steps should an employer take to ensure the time limit for making an application under section 78(4) of the PBA is complied with if the amount of the overpayment is unlikely to be determined until the fiscal year following the funding payment?

A: FSCO recognizes that wind ups take place over an extended period of time. If an employer reasonably believes that its funding of a wind up deficit could result in an overpayment of contributions that will not be determinable in the fiscal year that payment is made, the administrator should apply under section 105 of the PBA at the time the payment is made, for an extension of the one fiscal year time limit set out in section 78(4).  The time limit extension application should include an explanation as to why the deadline in section 78(4) is not likely to be met.  If the Superintendent is satisfied, he will extend the time limit for the application.  

For example, the Superintendent will ordinarily approve an application for an extension where the benefits are not likely to settle until after the end of the fiscal year in which the funding payment was made. Any time extension will be subject to the discretion of the Superintendent, however, and applicants will be expected to ensure that they file the application for a refund of an overpayment of contributions immediately or without delay once the financial position of the pension fund can be determined following the settlement of benefits and the determination that an overpayment exists.

The Superintendent does not encourage the filing of an application for a refund of overcontributions prior to the settlement of benefits (i.e. prior to knowing whether or not there will be excess assets remaining in the pension fund).  However, if an application is filed prior to the settlement of benefits, the Superintendent will advise the applicant that the application will be held in abeyance until the  benefits are settled and the applicant files proof as to the existence and amount of the excess assets remaining in the pension fund.