AuthorAri Kaplan, Mitch Frazer
A pension plan is a dynamic vehicle that will invar iably undergo chan-
ges over its lifetime. Companies reorgani ze and purchase and divest
themselves of operations, busine sses, and divisions. Pension fund
assets and liabilities ebb and f‌low with investment market conditions.
Unionizat ion and workplace environments affect member ship cover-
age and contribution levels. These factors and others can impact t he
need or desire of an employer to revisit the provisions of a pen sion plan.
In deference to freedom of contract, the Pension Benef‌its Act1 (t he
PBA) contemplates the living and evolving d imension of a pension plan.
As matters relating to p ension plan design, the implementation of plan
amendments and corporate tra nsactions affecting the plan generally
fall within the purview of plan sponsorship and the particular need s
of the stakeholders as ref‌lected in the plan documentation. However,
the legislation sets out a number of mostly procedural, but also some
substantive, constraints in relation to permitting a sponsor to make
a change affecting a pension plan. The purpose of the PBA’s am end-
ment and corporate transact ion provisions are to ensure that accrued
pension benef‌its and other employee interests in the pension plan are
protected and that employees receive due notice of changes affecting
1 RSO 1990, c P.8 [PBA].
their pension rights. At t he same time, the legislation gives re asonable
latitude to employers to carry out corporate t ransactions that requi re
changes to pension plans. In addition to the requirements of the PBA,
contractual, tru st, and other common law considerations can have the
effect of regulating and sometime s limiting pension plan amendments
and corporate transactions.
This chapter explores the delicate ba lance between employer and
employee rights when a pension plan undergoes any of the changes
described above.
1) Introduction
The authority to make an amendment to a pension plan i s generally a
function of contract. The PBA does not require, as a condition of regis-
tration, that a pension plan set out the manner by which amendments
to the plan may be made. A pen sion plan’s amending formula is usu-
ally left to the plan sponsor, often the employer, to draft in accordance
with general legal and contractua l principles. Typically, a pension plan
amendment is adopted by way of a resolution of the board of directors
of the company that sponsors and adm inisters the pension plan.
An exception to this rule is where the plan documentation con-
fers on the plan administ rator certain powers of plan amendment. This
is a function commonly seen in multi-employer pension plan (MEPP)
agreements or other plans co-s ponsored by private-sector groups, for
example trade unions. In addition, where employees represented by a
trade union participate in a pension plan, but the union itself is not
involved in the sponsorship or governance of the plan, some plan s will
require, as a matter of collective bargain ing, that the consent of the
union be obtained or that the un ion be notif‌ied with respect to all or
certain ty pes of amendments made to the plan.
These exceptions aside, most employer-sponsored pension plans
reserve to the employer a broad power to unilateral ly amend the plan
terms with only m inor constraints. A s a pure matter of contract, this is
defensible; but like many areas of pension law, regulatory, contractual,
and equitable considerations, serve to in form our understanding of the
applicable legal principles.
Amendment 435
2) Formal Statutory Criteria
a) Introduction
This section discus ses the principal requirements of the PBA in con-
nection with the regist ration and implementation of a pension plan
b) Application for registration
The pension plan administ rator is required to apply to the Superintend-
ent of Financial Services (the Superintendent) to f‌ile and register an
amendment to the pension plan.2 Similar rules apply in other jurisdic-
tions.3 An amendment is not effective until the adm inistrator commen-
ces this process.4 Once the amendment is f‌iled, the amendment may
be binding and enforceable and the administrator has an obligation to
administer the pla n in accordance with its term s, as amended, pend-
ing its for mal reg istration.5 An amendment f‌iled for registration may
be made effective prospectively or retroact ively.6 An amendment with
retroactive effect will generally be valid provided it does not reduce ac-
crued benef‌its.7
c) Notice of registration
After an admini strator f‌iles an application for registration of an amend-
ment, the Superintendent must issue a notice of registr ation.8 This is a
formal requirement of the PBA. There is “no magic” in the issuance of
a notice of registration and the mere acceptance for regist ration by the
2 PBA, s 12(1). The application must be m ade within sixty d ays after the date th at
the plan was a mended. The application for registr ation of the amendment must be
accompanied by a fee an d f‌iled with certif‌ied copie s of the “amending document”
(for example, board res olution) and other prescribed doc uments: s 12(2). There
are exceptions to t his rule for certai n specif‌ied pension plan s: PBA, s 12(2.1).
3 See federal (PBSA, s 10.1(1)), Alberta (AE PPA, s 20(1) and Reg, s 27(2)); British
Columbia (BCPBS A, s 15(1)); Manitoba (MPBA, Reg, s 2.7(1)); New Brunswick
(NBPBA, s 11(1) and Reg, s 5(1)); Newfoundland and L abrador (NLPBA, s 18(1));
Nova Scotia (NSPBA, s s 18(1) & (2)); Quebec (QSPPA, ss 24 & 25); Saskatc h-
ewan (SPBA, s 17).
4 PBA, s 13(1).
5 Consumers Packaging Inc by its m onitor, KPMG Inc, on behalf of O-I Cana da Corp
v Superinten dent of Financial Services a nd United Steel Workers of America, Local
203G (29 November 2002), File No P0162-2001 at 12 (Ont FST) [Consumers
Packa ging].
6 PBA, s 13(2).
7 See Section B(4)(b) in this chapter.
8 PBA, s 17. The Superintendent must is sue a separate notice of registr ation for
each pension pl an amendment registered.

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