The Better for People, Smarter for Business Act, 2019 (Bill 132) was introduced in the Ontario legislature last week. If passed, Bill 132 will make certain amendments to the Pension Benefits Act (PBA), as summarized below. Certain provisions are to come into force upon royal assent and others upon proclamation. This bulletin will highlight some of the key provisions of Bill 132 for Ontario pension plans.
ELECTRONIC COMMUNICATIONS
Bill 132 proposes several amendments to the PBA with respect to electronic communications, including deeming consent to electronic form of delivery for certain types of documents. Draft amendments to the PBA regarding electronic communications were released for consultation on August 6, 2019 (Consultation Document). There are some differences between the Consultation Document and Bill 132.
A notice, order or other document is sufficiently given, served or delivered in specified electronic forms where the person consents to accept it electronically or is deemed to consent. Consent may be inferred from the person's conduct if there are reasonable grounds to believe that the consent is genuine and relevant to the notice, order or other document.
In addition, Bill 132 contemplates deemed consent to accept certain documents in electronic form where the administrator has sent a notice to the member or former member by regular mail setting out:
- the date on which the administrator will begin to send documents in an electronic form;
- the person's last known email address;
- a statement that the person may, at any time, instruct the administrator to send documents to him or her in a written form other than electronic form; and
- any other prescribed information.
These deemed consent provisions apply only with respect to documents that the PBA, the General Regulation (Regulation) or Financial Services Regulatory Authority of Ontario (FSRA) rules require the administrator of a pension plan to send. This differs from the Consultation Document which referred to "notices, statements or other records."
Such deemed consent will not apply if the person instructs the administrator to send documents to him or her in a written form other than electronic form. A member, former member or retired member who has received the initial notice may, at any time, instruct the administrator to send documents to him or her in a written form other than electronic form.
The administrator shall not send such documents in electronic form if the document contains personal information or any prescribed information, unless the administrator sends the document by way of a secure information system that requires the intended recipient to identify themselves prior to accessing the document and complies with any other prescribed requirements.
A significant change to the Consultation Document is that deemed consent may continue after a member or former member who has received the initial notice becomes a retired member. To do so, the administrator must send a further notice when the member or former member becomes a retired member, within a reasonable time, by regular mail to his or her last known address and also in electronic form, setting out the last known email address of the member, and a statement that the person may instruct the administrator to send documents to him or her in a written form other than electronic form, in addition to any prescribed information.
Bill 132 provides that the administrator of a pension plan shall comply with conditions, requirements, limitations or prohibitions as may be prescribed with respect to sending a document in electronic form. In this respect, Bill 132 seeks to provide rule-making authority to FSRA for electronic communications.
BIENNIAL STATEMENTS FOR MISSING MEMBERS
Bill 132 looks to amend the PBA such that the Chief Executive Officer of FSRA (CEO) may waive the requirement to provide a former member or retired member with a written biennial statement where the CEO is satisfied that the administrator of a pension plan is unable to locate a former member or retired member, after making reasonable efforts to do so. In contrast, the PBA currently states that the CEO may provide a waiver where the CEO is satisfied that there are reasonable and probable grounds to believe that the former member or retired member is missing.
In addition, Bill 132 includes new provisions which set out the factors the CEO shall consider in determining whether an administrator has made such reasonable efforts to locate the former member or retired member, and further provides that the waiver from providing biennial statements to a former member or retired member is revoked and that the plan administrator is required to notify the CEO if the administrator receives the contact information of the missing former member or retired member.
CONVERSION OF SINGLE EMPLOYER PENSION PLANS TO JOINTLY SPONSORED PENSION PLANS
Bill 132 includes additions to the provisions respecting the conversion of a pension plan from a single employer pension plan to a jointly sponsored pension plan. Specifically, Bill 132 adds a provision stating that an employer may apply for the CEO's consent to a transfer of assets before the jointly sponsored pension plan is registered under the PBA. However, if the application for registration of the jointly sponsored pension plan is not received by the CEO within 90 days after the application for consent is made, the application for consent is deemed not to have been made.
Bill 132 also provides for the waiver or variation of certain provisions of the Regulation from the CEO in respect of the conversion of a single employer pension plan (whether by asset transfer or plan amendment) if he or she considers it appropriate in the circumstances.
PERSONS, BODIES AND ENTITIES ELIGIBLE TO ACT AS PLAN ADMINISTRATOR
Bill 132 will specify that, where a plan is a single employer jointly sponsored pension plan, the plan administrator may be a board of trustees appointed pursuant to the pension plan or a trust agreement establishing the pension plan of whom one-half are representatives of the employer and one-half are representatives of the members of the pension plan, in addition to certain other specified persons, bodies or entities.
DOCUMENTS THAT CREATE AND SUPPORT A JOINTLY SPONSORED PENSION PLAN
Bill 132 will provide that, where a board of trustees is the administrator of a jointly sponsored pension plan, documents that create and support the pension plan must set out the powers and duties of the board.
FAMILY LAW MATTERS
Amendments will be made to the PBA with respect to the manner in which statements of imputed value, for family law purposes, may be obtained where assets cease to be available, and to provide for lump sum transfers and division of pension in situations where, on or after the family law valuation date, assets have been transferred to another pension plan. Bill 132 seeks to expand FSRA's rule-making authority such that FSRA will have authority to make rules on additional family law matters.
GIVING, SERVING OR DELIVERING DOCUMENTS
Bill 132 proposes to amend the PBA with respect to other procedural matters, including electronic delivery of documents, delivery of notices and documents from FSRA, and other means of giving or delivering documents.
REGULATION- AND RULE-MAKING AUTHORITY
If passed, Bill 132 will add the ability of the Lieutenant Governor in Council to make regulations regarding the transitional matters for the implementation of certain sections of Bill 132. Bill 132 expressly provides that a regulation adopting by reference any code, formula, standard or procedure includes the power to adopt such code, formula, standard or procedure, as it may be amended from time to time after the regulation is made.
As mentioned above, Bill 132 also seeks to provide additional rule-making authority to FSRA with respect to electronic communications and certain family law matters.
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