Minimum Standards

AuthorAri Kaplan/Mitch Frazer
This chapter describes the principal minimum pension standards that
aim to ensure that an employee who participates in a pension plan will
have a pension available at the conclusion of their working life. Min-
imum standards arise under the Pension Benef‌its Act1 (t he PBA) and its
regulations, as ex panded upon in regulatory policies and in formed by
other releva nt legislat ion2 and the common law. These standards are
f‌irst and foremost employee protections and they can aect an employ-
er’s and employees’ freedom to contractually design t he provi sions that
form the content of a pension plan.
1) Introduction
The pension standards di scussed in this chapter are st atutory rights that
arise as a re sult of an employee’s membership in a pen sion plan. It might
be said that in the c ase of pension plans, membership has its right s, not
privileges. The legal nature of being a pla n “member” and the benef‌its
and obligations that f‌low therefrom, are well ar ticulated as follows:
1 RSO 1990, c P.8 [PBA].
2 Pension standa rds are also aected by t he Income Tax Act, RSC 1985, c 1 (5th
Supp), as amended [ITA]. The rules under the ITA are not minimum sta ndards
per se, but rather, ta x standards: see Chapter 3, S ection D(2).
Minimum Standards 201
A pension plan is not an a ssociation like a club, or a union. The word
“member” does not fairly de scribe the relat ionship. It is essential ly
a contractual and com mercial relationship. . . . The worker need not
have any voice in management of the pl an, or selection of its man-
agers, or any of the attribute s commonly associated w ith the word
membership in other contex ts. The plan could be, as such plans often
are, a private busine ss venture. “Membership” is simply t he word
chosen to descr ibe the worker’s bundle of rights, derive d either by
agreement or by tru st law or by statute, against t he managers.3
The focus of this chapter is pri ncipally on that “bundle of rights,” derived
from the PBA and other legal in struments that are conferred on employ-
ees who participate as member s of a pension plan.
2) Mandatory or Voluntary Membership
a) Term of contract of employment
A pension plan must set out the conditions for membership in the plan.4
In most jurisdictions, a plan sponsor may make membership voluntary
or mandat ory.5 In Manitoba, where an employee falls into the class
of employees for which a pension plan was established, membership
is mandatory.6 Where participation in a pension plan is a compulsory
term of employment, some jurisdictions provide for statutory exemp-
tions where the employee objects to membership on religious grounds.7
It will be a breach of the Human Rights Code where employment is
denied or made conditional because a ter m or condition of employment
3 Cicconi v Alberta (Superinte ndent of Pensions) (1991), 86 DLR (4th) 469 at 478
(Alta CA), leave to appeal to SCC ref used (1992), 92 DLR (4th) vi [Cicconi].
4 PBA, s 10(1)2.
5 See federal (PBSA, ss 14(1) & (2), and 15(4)); Alber ta (AEPPA , s 29(2)); British
Columbia (BCPBS A, s 29(2)); Quebec (QS PPA, s 34); and Saskatchew an (SPBA,
s 24(2)). In Ontario, t he PBA is silent on this point, but s ee FSCO Policy M100-
502 (March 2012) which provides th at mandatory membership m ay be a condi-
tion for membership set out i n the plan text.
6 MPBA, ss 21(19)–(19.2). Membership is mandator y for full-time employees after
two years of employ ment, and for part-time employees, af ter having earned 35
percent of the Year’s Ma ximum Pensionable Earni ngs (YMPE) or having worked
at least a speci f‌ied number of hours (which cannot exceed 700) for two conse cu-
tive calenda r years.
7 See federal (PBSA, s s 14(2) and 15(4)); Manitoba (MPBA , s 21(20)(b)). Manitoba
has addition al exemptions for employees who are ful l-time students (MPBA,
s 21(20)(a)) and certain employees h ired before the later of 1Januar y 1984 or
the commencement d ate of the plan (MPBA, ss 21(20)(c) & (d)).
requires enrolment in a pension plan that makes a dist inction, prefer-
ence, or exclusion on a prohibited ground of discrimination.8
b) Disclosure and enrolment by plan administrator
An employee eligible or required to join a pension plan has t he right
to receive from the plan admini strator a description of the provisions
that apply to the employee and an explanation of their rights and obli-
gations in respect of the plan.9 An employer is required to g ive the plan
administr ator all “information necessary to enable the ad ministrator to
comply” with its membership disclosure obligations.10
Where an eligible employee is not advised of their r ight to join the
pension plan, one possible remedy, depending on the circumsta nces, is
for the administrator to be requ ired to admit the employee retroactively.11
c) Voluntar y termination of membership
Ordinari ly, membership in a pension plan terminates when employ-
ment terminates. Some juri sdictions permit an employee to voluntarily
terminate membersh ip in a plan where the plan is a multi-employer
pension plan (MEPP) or the employee works part-time or has been laid
o from employment, and contributions have not been made to the plan
on the employee’s behalf for up to twenty-four months.12 In Quebec, an
employee may terminate membership without terminating employment,
if the plan terms permit.13
8 Hu man Rights Code, RSO 1990, c H.19, s 25(1) [OHRC]. Section 5 of the OHRC
provides th at every person has a rig ht to equal treatment wit h respect to employ-
ment without dis crimination becau se of race, ancestry, place of origi n, colour,
ethnic orig in, citizenship, creed, s ex, sexual orientat ion, gender identity, gender
expression , age, record of oences, marital st atus, same-sex part nership status,
family status, or disability.
9 PBA, ss 25(1) & (2). See als o federal (PBSA, s 28(1)(a)); Alberta (AE PPA, s 37(1));
British Columbi a (BCPBSA, s 37(1)); Manitoba (MPBA, s 29); New Brunswick
(NBPBA, s 23); Newfoundland an d Labrador (NLPBA, ss 25(1) and (3)); Nova
Scotia (NSPBA , s 38); Quebec (QSPPA, s 111); Saskatchewan (SPBA, s 13(1)(a)).
10 PBA, s 25(3).
11 Amalgamated Transit Union, Loca l 1182 (Re), [2003] NBL EBD No 39; Amalgam-
ated Transit Union, Local 1290 v New Brun swick (Superintendent of Pension s),
[2004] NBLEBD No 2; and Re Trustees of the St Bonifa ce Hospital/Union’s Jointly
Trusteed Pension Plan (Decis ion of the Pension Commission of Man itoba dated
16 September 1997, written decision 8 De cember 1997).
12 Ontario (PBA, s 3 8); Nova Scoti a (NSPBA, s 54(1)). In federal (PBSA, s 2(2)), this
is limited to c ertain circumst ances where the plan is a MEPP.
13 QSPPA , s 36(1).

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