Although clarification regarding expenses chargeable to pension
funds was provided in late 2010 with the addition of a new section
22.1 in the Ontario Pension Benefits Act ("PBA"), Policy
A200-101 provides additional guidance that is welcome.
Policy A200-101 reiterates that fees and expenses payable from a
pension fund must:
relate to the administration of the pension plan or the
administration and investment of the pension fund; and
not be prohibited or otherwise provided for under the documents
that create and support the plan or the fund, or under the PBA or
It is the plan administrator's responsibility to determine
whether or not an expense fits the criteria to be properly charged
to a pension fund. So it is up to the plan administrator to decide
whether amounts are appropriate and reasonable, and to find out
whether there are provisions in the pension plan documentation that
restrict the charging of expenses.
Since each pension plan is unique, the PBA and regulations do
not set out the specific nature or type of administrative expenses
that can be paid from a pension fund. However, Policy A200-101
provides examples of the types of expenses that would usually be
considered appropriate administrative expenses, such as certain
actuarial fees, trustee and custodial fees, and investment
management fees. It also provides examples of expenses incurred
that would not usually be properly chargeable to a pension fund.
These typically include fees incurred by a person acting in the
role of plan sponsor, collective bargaining agent or employer.
Many types of fees and expenses incurred by a plan sponsor or
administrator can be complex and difficult to categorize. FMC can
help you identify proper fees and expenses that can be charged to
your pension fund. Please feel free to contact one of our Pension
& Benefit experts and we would be pleased to assist.
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