AuthorAri Kaplan/Mitch Frazer
A pension plan is a dynamic vehicle that will invariably undergo chan-
ges over its lifetime. Companies reorgani ze and purchase and divest
themselves of operations, busi nesses, and divisions. Pension fund as sets
and liabilities ebb and f‌low with investment market conditions. Union-
ization and workplace environments a ect membership coverage and
contribution levels. These factors and others can h ave an impact on the
need or desire of an employer to revisit the provision s of a pension plan.
In deference to freedom of contract, the Pension Benef‌its Act (the
PBA)1 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 transactions aecting 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 aecting a pension plan. The purpose of the PBA’s amendment
and corporate trans action provisions are to ensure that accrued p ension
benef‌its and other employee interests in the pension plan are protected
and that employees receive due notice of changes aecting t heir pension
1 RSO 1990, c P.8 [PBA].
rights. At the same ti me, the legislation gives reasonable latitude to
employers to carry out corporate tra nsactions that require ch anges to
pension plans. In addition to the requi rements of the PBA, contractual,
trust, and other st atutory and common law considerations ca n have the
eect of regulating and sometimes limiting pension plan amendments
and corporate transactions.
This chapter explores the delicate balance between employer and
employee rights when a pension plan undergoes any of the changes
described above.
1) Introduction
The authority to amend a pension plan is generally a funct ion of con-
tract. The PBA does not require, as a condit ion of registration, that a
pension plan set out the manner by which amend ments to the plan may
be made. The manner in which to amend a pension plan is usually left
to the plan sponsor, often the employer, to draft in accordance with gen-
eral legal and contractual pr inciples. Typically, a pension plan amend-
ment is adopted by way of a resolution of the board of directors of the
company that sponsors and administers the pension plan.
An exception to this rule is where the plan documentation confers
on the plan administrator certain powers of plan amendment. Thi s is a
function commonly seen in multi-employer pension plan (MEPP) agree-
ments or other plans co-sponsored or jointly governed by trade unions.
In addition, where employees represented by a trade union part icipate
in a pension plan, but the union itself is not involved in the sponsor-
ship or governance of the plan, some plans will require, as a matter of
collective bargaining, th at the consent of the union be obtained or that
the union be consulted or notif‌ied with re spect to all or certain t ypes
of amendments made to the plan.
These exceptions aside, most employer-sponsored pension plans
reserve to the employer a broad power to unilaterally amend the plan
terms with only m inor constraints. As a pure matter of contract, this is
defensible; but like many areas of pens ion law, regulatory and equitable
considerations serve to in form our understanding of t he applicable legal
Amendment 447
2) Formal Statutory Criteria
a) Introduction
This section discusses the principal requ irements of the PBA in con-
nection with the regist ration and implementation of a pension plan
b) Application for registrat ion
The pension plan administ rator is required to apply to the Chief Exec-
utive Ocer (CEO)2 of the Financial Services Reg ulatory Authority of
Ontario (FSRA) to register an amend ment to the pension plan.3 Similar
rules apply in other jurisdictions.4 An amendment is not eective until
the administ rator commences this process.5 Once the amendment is
f‌iled, the amendment may be binding a nd enforceable and the admin-
istrator has an obligation to admi nister the plan in accordance with its
terms, as amended, pend ing its formal registration.6 An amendment
f‌iled for registration may be made eect ive prospectively or retroactive-
ly.7 An amendment with retroactive eect will generally be valid pro-
vided it does not reduce accrued benef‌its.8
c) Not ice of regist ration
After an admini strator f‌iles an application for registration of an amend-
ment, the CEO must issue a notice of registrat ion.9 This is a formal
requirement of the PBA. There is “no magic” in the issuance of a notice
of registration and the mere accepta nce for registration by the CEO does
2 The position of the CEO in O ntario is referred to a s the “Superintendent of
Pensions” or simil ar, in most other jurisdiction s.
3 PBA, s 12(1). The application must be made w ithin sixty day s after the date that
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 certain s pecif‌ied pension plans: PBA , s 12(2.1).
4 See federal (PBSA, s 10.1(1)), Alberta (AE PPA, s 18) and Reg, s 19); British Col-
umbia (BCPBSA, s 18); Manitoba (MPBA , Reg, s 2.7(1)); New Brunsw ick (NBPBA,
s 11(1) and Reg, s 5(1)); Newfoundland and Labra dor (NLPBA, s 18(1)); Nova
Scotia (NSPBA , s 22); Quebec (QSPPA, s s 24 & 25); Saskatchewan (SPBA, s 17).
5 PBA, s 13(1).
6 Consumers Packaging Inc by its monitor, KPMG Inc, on behalf of O -I Canada 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].
7 PBA, s 13(2).
8 See Section B(4)(b) in this chapte r.
9 PBA, s 17. The CEO must issue a separ ate notice of registration for each p ension
plan amendment registered.

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