The Colleges of Applied Arts and Technology Pension Plan - November 9, 2006

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 section 87 of the PBA that The Colleges of Applied Arts and Technology Pension Plan, Registration Number 0589895 comply with section 8(1)(e) of the PBA

TO:

Ontario Colleges Retirees’ Association
111 Merton Street, #410
Toronto, ON M4S 3A7

Attention: Robert Pando
President
Applicant

AND TO:

Colleges of Applied Arts and Technology Pension Plan
2 Queen Street East, Suite 1400
Toronto ON M5C 3G7

Attention: Paul E. Owens
Plan Manager & CEO
Administrator

Fred Fotopoulos
Director, Finance
Board of Trustees

 

NOTICE OF PROPOSAL

I PROPOSE TO MAKE AN ORDER pursuant to section 87 of the PBA, that the Board of Trustees (the “Board”) of the Colleges of Applied Arts and Technology Pension Plan, Registration No. 0589895 (the “Plan”) modify the composition of the Board to comply with section 8(1)(e) of the PBA.

REASONS:

  1. The Plan is a multi-employer pension plan (“MEPP”) established pursuant to a collective agreement or trust agreement.

  2. The Plan is subject to a Sponsorship and Trust Agreement effective as of January 1, 1995 (the “Trust”). The text of Article 4.01 of the Trust and section 16.01 of the Plan as of 2005 state that the Board shall administer the Plan and trust funds for the Plan.

  3. The Trust provides that the Board members are to be appointed by a Sponsor’s Committee that is an eight-member committee of representatives of the parties to the Trust agreement (i.e. the Employers and bargaining agents). Article 11.02 of the Trust as amended defines the composition of the Sponsor’s Committee: four members appointed by the Employers collectively, three members appointed by OPSEU, and one member appointed by OCASA.

  4. Article 4.02 of the Trust as amended and summarized below describes the composition of the twelve-member Board in subsections (a) through (d):

    (a) Six Trustees appointed by the Employer Committee Members of the Sponsors’ Committee;

    (b) Four Trustees appointed by the Employee Committee Members of the Sponsors’ Committee appointed by OPSEU;

    (c) One Trustee is a Former Plan Member appointed by the Sponsors’ Committee as a whole, in accordance with Section 4.03; and

    (d) One Trustee appointed by the Employee Sponsors’ Committee member appointed by the Ontario College Administrative Staff Association (“OCASA”).

  5. The trustee referred to in Article 4.02(c) of the Trust (the “4.02(c) Trustee”) is appointed according to the procedure set out in Article 4.03 of the Trust. As indicated in Articles 4.02(c) and 4.03, the Sponsors’ Committee as a whole (including the Sponsors’ Committee members appointed by the Employers) appoints the Article 4.02(c) Trustees. This is to be contrasted with the Trustees appointed under Articles 4.02(b) and (d) who are appointed solely by the Sponsors’ Committee members appointed by the bargaining agents.

  6. In addition, Article 4.03 requires that the Article 4.02(c) Trustee be a former member of the Plan and appointed from among specified groups of former members. The terms of the Trust require that the position rotate for equal terms between (1) former members who were employed as support staff upon termination of Plan membership; (2) former members who were employed as faculty upon termination of Plan membership; and (3) former members who were employed on the administrative staff upon termination of Plan membership.

  7. “Former Plan Member” is defined in the Trust as “...a person who has ceased to be a Member of the Plan and who is entitled to Benefits under the Plan immediately or at a future time.” “Member” is defined in the Trust as “...any person who is employed by an Employer and on whose behalf an Employer is making contributions to the Fund or who is otherwise eligible for Benefits as an active member of the Plan.”

  8. Section 8(1) of the PBA provides that
    A pension plan is not eligible for registration unless it is administered by an administrator who is,

    (e) if the pension plan is a multi-employer pension plan established pursuant to a collective agreement or a trust agreement, a board of trustees appointed pursuant to the pension plan or a trust agreement establishing the pension plan of whom at least one-half are representatives of members of the multi-employer pension plan, and a majority of such representatives of the members shall be Canadian citizens or landed immigrants; [emphasis added]

  9. The requirements of section 8(1)(e) of the PBA are mandatory in order to ensure employee involvement in the administration of multi-employer pension plans. Section 8(1)(e) requires one-half of the Board to represent members, not former members. “Member” is defined in the PBA to mean “a member of the pension plan” while the PBA defines “former member” as an individual who has terminated employment or membership in a pension plan.

  10. The 4.02(c) Trustee is selected by the Sponsors’ Committee as a whole (including the Sponsors’ Committee members appointed by the Employers) rather than just the Sponsors’ Committee members appointed by the bargaining agents. In addition, the Article 4.02(c) Trustee is a former member (rather than a member as defined in the PBA) and is appointed from classes of former members. The selection process for the 4.02(c) Trustee, as described in Articles 4.02 and 4.03 of the Trust, supports the conclusion that the 4.02(c) Trustee represents the former members of the Plan.

  11. Otherwise, there is no basis in the wording of the Trust to conclude that the 4.02(c) Trustee was intended to represent members rather than former members and to overcome the presumption created by the selection process for the 4.02(c) Trustee.

  12. Accordingly, on the basis of the wording of the Trust, six of the twelve trustees appointed under Article 4.02(a) of the Trust represent the Employers in the Plan. The five trustees appointed under Articles 4.02(b) and (d) are appointed by bargaining agents and are “representatives of members” within the meaning of section 8(1)(e) of the PBA. The trustee appointed pursuant to 4.02(c) of the Trust is not a “representative of members” but represents former members. Because only five of the twelve trustees are representatives of members of the Plan, the Plan does not comply with section 8(1)(e) of the PBA.

  13. Section 19 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 PBA and regulations. Section 87 of the PBA gives the Superintendent the authority to make an order if the “Superintendent is of the opinion, upon reasonable and probable grounds, that the pension plan or pension fund is not being administered in accordance” with the PBA.

  14. For the reasons set out above, the Plan and its manner of administration does not comply with section 8(1)(e) of the PBA. The Superintendent therefore proposes to issue the order set out in this notice.

  15. 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 9 day of November, 2006.


K. David Gordon
Deputy Superintendent, Pensions

Copy:

TO: Bellmore & Moore
Barristers
393 University Avenue, Suite 1600
Toronto, ON M5G 1E6

Attention: Brian P. Bellmore LL.B., LL.M.

Counsel for the Applicant

AND TO: Gowling Lafleur Henderson LLP
1 First Canadian Place
100 King Street West, Suite 1600
Toronto, ON M5X 1G5

Attention: Daniel R. Hayhurst

Counsel for the Administrator

*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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