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.