Superintendent’s Power to Order a Pension Plan to be Wound Up: New Rules

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[author: Mark Dunsmuir]

Effective July 1, 2012, the Ontario Superintendent of Financial Services’ powers to order the wind-up of a pension plan has been expanded to include instances where the plan has no active members, or the plan members are no longer accruing pension benefits.

A wind-up order will not be automatic; the Superintendent must take action for a wind-up order to be effective.

It is possible that the Superintendent will not exercise his authority to order a wind-up unless he believes that the security of the members’ benefits is in jeopardy. This will be a sensitive issue for pension plan sponsors who have ceased accruals in defined benefit pension plans, who do not wish to carry out a wind-up in the current environment where solvency deficiencies are at an all-time high.

 

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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