On November 16, 2016, Bill 70, Building Ontario Up for Everyone Act (Budget Measures), 2016 (Bill) received first reading in Ontario's legislative assembly. If passed, the Bill will amend the Pension Benefits Act (Ontario) (Act) in various respects.
- The rules regarding portability
options have been amended. Portability options are the options
available to a former employee to withdraw his or her pension in
lump sum and transfer it to certain other types of plans, such as
another pension plan or a prescribed retirement savings
arrangement. Due to amendments made to the Act in 2012, portability
options were technically restricted to employees whose employment
terminated prior to the employee's normal retirement date set
out in the pension plan.
The Bill amends the Act so employees whose employment terminates on or after the normal retirement date can be provided portability options prior to the member electing to receive a pension, if the plan so provides.
- The Bill also amends the Act to
require the approval of the Superintendent of Financial Services
(Superintendent) before life annuities may be purchased in
connection with a plan wind-up. Such approval is only required
where the administrator of the plan was appointed by the
Superintendent under the Act.
- The Bill also amends the Act to permit regulations exempting employers and successor employers from the requirement to pay certain amounts into a pension fund in the course of a plan wind-up. Such exemption would be available only if pursuant to an application under the Companies' Creditors Arrangement Act (Canada) a court made an order on or before December 15, 2015 staying all proceedings against the employer, and the Superintendent has approved an agreement with respect to the employer's liability under section 75 of the Act and with respect to the liability of the successor employer, if any.
- The Bill also amends the Act to provide for the Superintendent's authority to impose administrative penalties for contravention of a requirement under the Act or a prescribed provision of the Act or regulations. General penalties and penalties given in accordance with a summary process are provided in the amendments together with maximum penalty amounts.
- The regulation-making power under the Act will be expanded to provide for regulations governing administrative penalties imposed under the Act and to the timing and manner of allocating amounts from the Pension Benefits Guarantee Fund and paying those amounts to pension plans.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
