Regulation

• Author: Ari Kaplan, Mitch Frazer
• Pages: 126-193

126

CHA PTER 4

R EG UL ATIO N

A. INT RODUC TION

Every pension plan registered i n Ontario or covering persons employed in

Ontario is subject to the Pension Be nef‌its Act (PBA) and, is thereby, within

the jurisdiction of the Ontario pension regulator. This chapter outlines

the corporate and organizational structure of the Ontar io pension regu-

lator, the division of responsibilities a mong its various components, the

scope of its jurisdiction to addre ss certain matters, and it s decision-mak-

ing powers, practices, and procedures for adjudicating pen sion disputes.

B. FINA NCIAL SERVICES COMMISSION OF

ONTA R IO

1) Introduction

“All persons who establish or administer a pension plan within the mean-

ing of the Pension Benef‌its Act and all employers or other persons on their

behalf who are required to contr ibute to any such pension plan” belong to

the “pension sector,” one of six “regulated sectors”1 governed by the Finan-

1 Financial Ser vices Commission of Ontario Act, 1997, SO 1997, c 28, s 1(f), “regu-

lated sector.” The other regulated s ectors include: (a) all co-operative corp ora-

tions to which t he Co-operative Cor porations Act appl ies; (b) all credit unions,

Regulation 127

cial Services Commission of Ontario Act, 1997 (th e FS CO Act).2 The FSCO

Act establi shed the Fina ncial Ser vices Com mission of Ontario3 (F SCO),

the purpose of which is to “provide regulatory services that protect the

public interest and enhance public conf‌idence in the regul ated sectors.”4

There are four bodies associated w ith FSCO that participate in the

regulation of pension plans in O ntario: the FSCO board, the executive

branch of government, the Superintendent of Financial Services, and

the Financial Ser vices Tribunal. Each is discussed below.

2) FSCO Board

a) Composition and struct ure

FSCO is constituted as a f‌ive-member commission comprise d of a chair,

two vice-chairs, t he Superintendent of Financial Serv ices, and the Dir-

ector of Arbitrations.5 The chair and vice-cha irs are appointed under

orders-in-council by the Lieutenant Governor in Council.6 If t he chair

is absent, unable to act, or his or her off‌ice is vacant, t he vice-chairs

are required to designate one of them to act in the place of the chair.7 A

majority of the members of the board const itutes a quorum.8 The FSCO

board hires employees to assist in the carr ying out of its mandate.9

b) Statutory functions

In addition to its mandate to regul ate its sectors in the public interest,

the FSCO board has a number of speci f‌ic functions under the FSCO A ct.

caisse s populaires, and league s to which the Credit Unions and Caisses Populai-

res Act, 1994 applies; (c) all persons engaged i n the business of insu rance and

governed by the Ins urance Act; (d) all corporat ions registered or incorpor ated

under the Loan an d Trust Corporations A ct; and (e) all mortgage brokerage s,

brokers, agents, and ad ministrators licen sed under the Mortgage Brokerage s,

Lenders an d Administrators Act, 2006.

2 SO 1997, c 28 [FSCO Act].

3 FSCO Act, s 2(1).

4 FSCO Act, s 3(a).

5 FSCO Act, s 2(2). The Director of Arbitration s is appointed under the Insurance

Act (ibid, s 1 “Director”) and has no di rect responsibility over t he pension sector.

6 FSCO Act, s 4(1).

7 FSCO Act, s 4(2). If a vice-chai r is absent or unable to act, or if the of f‌ice of a

vice-chai r is vacant, the chair m ay designate a member of the Fi nancial Service s

Tribunal to act in t he place of the vice-chair a nd who shall have the powers of a

vice-chai r: FSCO Act, s 4(3).

8 FSCO Act, s 2(3).

9 See, for example, FSCO Act , ss 5(3) & (4), 8(1), 9(1), 10(1) and (3). Under FSCO

Act, s 8(1), employees of FSCO are appointed u nder Part III of the Public Servic e

of Ontario Act, 2006.

PENSIO N LAW

128

These include making recommendations to t he Minister of Finance on

matters affecting the regulated sectors;10 providing re sources necessar y

for the proper functioning of the Financial S ervices Tribunal;11 est ab-

lishing conf‌lict of interest guidelines with which its members, employ-

ees, and the members of the Fina ncial Services Tribunal must comply;12

publishing annual statements of priorities for the coming f‌iscal year13

and other information that it considers i n the public interest;14 f‌iling

annual and other reports on its a ffairs15 or concern ing infor mation re-

quired by the Minister of Fin ance;16 requiring fees in relation to matters

under its jurisd iction;17 and recommending to the Lieutenant Governor

in Council, on request, the manner i n which regulations made under

the FSCO Act should determine the sha re of assessments in re spect of

a regulated sector and the share of the a ssessment payable by an entity

that forms part of the sector.18 The FSCO board is f‌inancially account-

able to the Provincial Auditor General, who is requi red to examine an-

nually the board’s accounts and f‌inanci al transactions.19

c) Immunity and civil proceedings

The FSCO Ac t insulates members of the FSCO board, the Tribunal, the

Superintendent, and their employees from actions for damages “for any

act done in good faith in the execution or intended execution of the

person’s powers or duties or for any neglect or default in the execution,

in good faith, of the person’s powers or duties.”20 All such persons are

also excused from bei ng required to testify in a civil proceeding, in a

proceeding before the Superintendent or the Tribunal or in a proceed-

10 FSCO Act , s 3(b).

11 FSCO Act , s 3(c).

12 FSCO Act, s 9(1). FSCO has establi shed such conf‌lict of interest guid elines and

is requi red to deliver a copy of them to the Min ister of Finance: FSCO Ac t, s 9(2).

13 FSCO Act, s 11(1). This must be delive red to the Minister of Fina nce and pub-

lished in The Ont ario Gazette within ni nety days after the star t of each f‌iscal

year. Also, at least s ixty days before publication , a notice must be published in

the Ontario Gazette inv iting “interested per sons” to make written repre senta-

tions as to the m atters that should be identif‌ie d as priorities: FSCO Act , s 11(2).

14 FSCO Ac t, s 11(3).

15 FSCO Act, s 15(1). The annual report must be f‌i led within a reasonable t ime

after the clos e of each f‌iscal year. The Minist er shall submit the report to th e

Lieutenant Gover nor in Council and lay it before the Le gislative Assembly if it

is in sess ion or, if not, at the next se ssion: FSCO Act, s 15(2).

16 FSCO Act , s 15(3).

17 FSCO Ac t, s 27(1).

18 FSCO Act , s 25(6).

19 FSCO Act , s 14.

20 FSCO Act, s 10(1).