FSCO Instructions for MEPPs & JSPPs Looking to Opt Out of Grow-In Benefits Now


[author: Douglas Rienzo]

The Financial Services Commission of Ontario (FSCO) has posted information for jointly sponsored pension plans (JSPPs) and multi-employer pension plans (MEPPs) which are planning to opt out of the new grow-in benefit regime. Of particular note, these plans may file notice of their election with the Superintendent of Financial Services before July 1, 2012, though the effective date of the election cannot be earlier than July 1, 2012.


As a result of previous amendments to the Ontario Pension Benefits Act (the PBA), expected to be effective July 1, 2012, all defined benefit (DB) plan members who satisfy the “rule of 55” will be entitled to grow-in benefits if their employer terminates their employment, unless such termination “is a result of wilful misconduct, disobedience or wilful neglect of duty by the member that is not trivial and has not been condoned by the employer,” or such other exceptions as prescribed by the regulations apply. JSPPs and MEPPs can opt out of this expanded grow-in regime by filing an election with the Superintendent excluding their members from the operation of s. 74 of the PBA.

Draft amendments to Regulation 909 under the PBA (the Draft Regulations) specify that current JSPPs and MEPPs which want to opt out of the grow-in regime must do so by July 1, 2013, and that JSPPs and MEPPs established after the new rules come into force may opt out within one year of their establishment. The Draft Regulations also set out:

  • information to be included on the election form (e.g., the name and registration number of the pension plan, the name and contact information of the administrator and the effective date of the election); and
  • notice requirements (e.g., for members, employees eligible to become members, unions and advisory committees).

JSPPs and MEPPs may also subsequently rescind an election to opt out. The way the Draft Regulations are currently worded, there can be no subsequent opt out once such rescission has occurred.

FSCO Announcement

In its recent announcement, FSCO provides further details on the information that they want to see included in an election. In particular, in the case of a JSPP, the election must include a confirmation that the decision to opt out of the grow-in benefits regime was made by the employers and the members (or their representatives) of the JSPP, and the election must be signed by an individual authorized to sign the election on behalf of the employers and the members. An election from a MEPP must include a similar confirmation from the plan administrator.

As I noted above, MEPPs and JSPPs can file these election forms now (with an effective date of July 1, 2012). Should the Draft Regulations not come into force on July 1, 2012 or if the Draft Regulations are changed so as to not permit elections to be filed prior to July 1, 2012, however, these previously filed elections will be invalid.

FSCO’s announcement also notes that JSPPs and MEPPs which are registered in other jurisdictions but have Ontario members may also elect to opt out of providing grow-in benefits to their Ontario members.


Published In: Administrative Agency Updates, Finance & Banking Updates, Labor & Employment Updates

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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