AuthorAri Kaplan, Mitch Frazer
The convergence of statutory compliance and common law duties of
care resonates most ful ly in the area of pension plan admi nistration.
This chapter describe s the identity and functions of the pen sion plan
administrator and the legal principles affecting the duties and stan-
dards of care owed by the administrator and its agents to employees
and other plan stakeholders in car rying out the pension plan m andate.
1) Identity of the Administrator
a) Who may be the administrator
The Pension Be nef‌its Act1 (PBA) requires that every pension plan have
an “administrator.” A pension plan that does not identify an adminis-
trator is not eligible for registration.2 The identity of the administra-
tor is a matter of plan design. The PBA set s out the prescribed person,
persons or entity that may be an administr ator. Specif‌ically, an ad-
ministrator may be a n employer;3 an arm’s length “pension committee”
1 RSO 1990, c P.8 [PBA].
2 PBA, s 8(1).
3 PBA, s 8(1)(a). If there is more than one employer, the ad ministrator may be one
or more of those employers.
Administration 305
comprised of employer a nd employee representatives4 or just employee
representatives;5 an insurance company;6 a board of trustees;7 a statu-
tory cor poration, board, agency or commi ssion;8 a person appointed by
the Superi ntendent;9 or any other prescrib ed person or entity.10
Similar, but not identical, requirements exi st in other jurisdic-
tions.11 In Quebec and Manitoba, most pension plans reg istered in
those provinces wit h more than twenty-f‌ive employees (in Quebec)
or f‌ifty employees (in Manitoba) must be administered by a “pen sion
committee” that, except in very lim ited circumstances,12 include s em-
ployee and pen sioner represent ation.13
4 PBA, s 8(1)(b).
5 PBA, s 8(1)(c).
6 PBA, s 8(1)(d). If an insurance comp any is the administ rator, all the pension
benef‌its under t he pension plan must be guar anteed by the insuranc e company.
7 PBA, s 8(1)(e). The administrator must b e a board of trustees if t he pension plan
is a multi-employer p ension plan established pu rsuant to a collective agreeme nt
or a trust agr eement; see Section 1(b) below in this cha pter.
8 PBA, s 8(1)(f).
9 PBA, s 8(1)(g). This applies where the pens ion plan is being wound up. Upon
proclamat ion of new legislative provisions , the Superintendent will h ave the
authority to appoi nt an administrator in s ituations other than pla n wind up, as
well as admi nister a plan itself.
10 PBA, s 8(1)(h).
11 See, for example, feder al Pension Benef‌its Standard s Act, 1985, RSC 1985 (2d
Supp), c 32 [PBSA], ss 7–7.1.
12 In Quebec, if a plan ha s fewer than twenty-six mem bers and benef‌iciarie s, the
employer may take t he place of the pension committee . The employer shall, for
the admin istration of the plan, have t he powers, obligations, and liabi lity of a
pension comm ittee: QSPPA , s 149 and Reg (respecting t he exemption of certain
categories of pen sion plans from the applicat ion of the Supplemental Pension
Plans A ct), ss 1 & 2. In Man itoba, a pension committee need only b e established
where the pension pl an has more than the pre scribed number of employees:
MPBA, s 28.1(1) and Reg, s 3.4, sets the number of employees at f‌ifty.
13 In Quebec, a pension plan mus t be administered by a pen sion committee
comprised of at lea st three persons, includ ing one person who is neither a
participa nt nor prohibited from receiving a loan f rom the plan, one person
who is design ated by the employees in the plan at a n annual meeting or, in the
absence of such a des ignation, one employee designate d as and when provided
in the plan, an d one person who is designated by t he pensioners and other
benef‌iciar ies at the annual meeting or, in th e absence of such a designation, one
employee or benef‌icia ry designated as and whe n provided in the plan: QS PPA,
ss 147–59. Pension committee s have the power to establish i nternal by-laws
prescribi ng rules pertain ing to the procedure and governa nce of the commit-
tee. These bylaw s may cover a variety of prescr ibed topics, and can overr ide
provisions i n the plan text. In Manitoba , a pension plan must provide for the
appointment or elect ion of committee members in accorda nce with the regula-
tions, and must en sure that at least one voting act ive member is appointed
While more than one individual can comprise the body that admin-
isters the plan, the legi slation contemplates the existence of only one
administrator.14 An admin istrator can and usually w ill delegate some
of its responsibilities to various persons or committees, including t he
employer or a trade union, a professional third-part y administrator, in-
vestment managers, consulta nts, and advisors. While this may create
an agency relationship between the adm inistrator and its delegate, it
does not change the identity of the admi nistrator for the purposes of the
PBA.15 The Income Tax Act16 (th e I TA) def‌ines the admini strator as the
body with “ultimate responsibility for the admini stration of the plan.”17
Except where permitted in wr iting by the Canada Revenue Agency
(CRA), the administ rator (or the majority of the persons who constitute
the administ rator) must be resident in Canada.18
b) Employee representation
In most pension plans, the administrator is usually the employer that
also sponsors the pla n. Except in very limited circum stances, the PBA
neither provides as a right, nor requires, employees and pensioners to
participate in the adm inistration of the plan. Employee participation in
the administ ration of the plan is permis sive under the PBA, the right
to which derives from collective bargaining or other contractual obliga-
tion imposed on the plan sponsor.19 As a result, a gr ievance arbitration
can decide whether unionized employees should be included in the
or elected by the act ive members, at least one voting non-act ive member is
appointed or elected by t he non-active members, and one addit ional non-voting
member may be appoi nted or elected by the active and non-act ive members:
MPBA, ss 28.1(1)(f) and 28.1(1.2).
14 R v Blair (1995), 129 DLR (4th) 367 at 405 (Ont Ct Gen Div), rev’g (1993), 106
DLR (4th) 1 (Ont Prov Ct).
15 See “Who Is an Admin istrator” in (1990) 1(2) Pension Bulletin 8 at 9. Accord-
ingly, where an employer appoint s itself as admini strator of the pension plan (in
accordance w ith PBA, s 8(1)(a)) and delegates a numb er of day-to-day respon-
sibilities to a p ension committee, the commit tee is not a “pension committee”
adminis trator pursuant to PBA, s 8(1)(b), since this would create two adm inis-
trators and th e PBA does not contemplate “multi” admin istrators. Instead, t he
pension commit tee is an agent of the adminis trator to the extent of its delegated
16 RSC 1985 (5th Supp), c 1, as amended [ITA].
17 ITA , s 147.1(1) “administrator.”
18 ITA, s 147.1(6). Also, CRA mu st be informed in writ ing, within thir ty days after
the admin istrator has been const ituted, of the name and addres s of the admin-
istrator or of each me mber of the body that is the ad ministrator and be noti f‌ied
of any change in suc h information within s ixty days after the ch ange: s 147.1(7).
19 PBA, ss 8(1)(b) and (e).

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