Regulation

• Author: Ari N. Kaplan
• Profession: Partner, Koskie Minsky LLP. Faculty of Law, University of Western Ontario
• Pages: 137-208

CHAP TER 4

REGULATION

A. INTRODUCTION

Every pension plan registere d in Ontario or covering persons employed in

Ontario is subject to the Pe nsio n Bene f‌i ts Act (PBA) and, is thereby, within

the jurisdict ion of the Ontario pension regul ator. This chapter outlines

the corporate and organiz ational structure of the Ontario pension regu-

lator, the div ision of re sponsibilities among its v arious components, t he

scope of its jurisdict ion to address certai n matters, and its decision-mak-

ing powers, practices, and procedures for adjudicating pension dis putes.

B. FINANCI AL SERVICES COMMISSION OF

ONTA R IO

1) Introduction

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

ing of the Pensio n Bene f‌i ts Act and all employers or other persons on their

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

to the “pe nsion sector,” one of six “regu lated sectors”1 governe d by the Fi-

1Financial Ser vices Commission of Ontario Act , 1997, S.O. 1997, c. 28, s. 1(f),

“regulated s ector.” The other regu lated sectors include: (a) all co-oper ative

137

PENSION LAW138

nancial Services Commission of Ontar io Act, 19972 (th e FSCO Ac t). The FSCO

Act establishes the Fin ancial Serv ices Commission of Ontar io3 (FSCO),

the purpose of which is to “provide regulatory ser vices th at protect the

public interest and enhance public conf‌i dence in the regulated sectors.”4

There are four bodies associated w ith FSCO that participate in t he

regulation of pension plans in Ontario: the FSCO board, the executive

branch of gover nment, the Superintendent of Financ ial Ser vices a nd

the Financial Services Tribunal. Each is discus sed below.

2) F SC O Bo a rd

a) Composition and structure

FSCO is constituted as a f‌i ve-member commission comprised of a chair,

two vice-chairs, the Superintendent of Financial Services and the Dir-

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

orders-in-council by the Lieutenant Governor in Council for period s

of up to three years.6 If the chair is absent, un able to act, or his or her

off‌i ce is vacant, the v ice-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

constitutes a quorum.8 The FSCO board hires employees to a ssist in the

carry ing out of its mandate.9

b) Statutory functions

In addition to its mandate to regulate its sectors in the public interest,

the FSCO board has a number of specif‌i c funct ions under the FSCO Act.

corporation s to which the Co-operat ive Corporation s Act applies; (b) all credit

unions, cai sses populaires a nd leagues to which the Credit Unions and Cai sses

Popul aires A ct, 1994 appl ies; (c) all person s engaged in the business of i nsurance

and governed by t he Insurance Act; (d) all corporations reg istered or incorpor-

ated under the Loa n and Trust Cor porations Act; and (e) all mortgage brokers

registered unde r the Mortgage Brokers Act.

2 S.O. 1997, c. 28 [FSCO Act].

3Ibid., s. 2(1).

4Ibid., s. 3(a).

5Ibid., s. 2(2). The Director of Arbitrations is ap pointed under the Insurance Act

and has no dir ect responsibility over t he pension sector.

6Ibid., s. 4(1).

7Ibid., s. 4(2). If a vice-chair is absent or u nable to act, or if the off‌i ce of a vice-

chair is vac ant, the chair may des ignate a member of the Financ ial Services

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

vice-chair: ibid., s. 4(3).

8Ibid., s. 2(3).

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

ibid., s. 8(1), employees of FSCO ar e subject to the Public Service Act.

Regulation 139

These include making recommendations to the Minister of Finance on

matters affecting t he regulated sectors;10 providing re sources necessary

for the proper functioning of the Financi al Service s Tribunal;11 estab-

lishing conf‌l ict of interest guidelines with which its members, employ-

ees, and the members of the Fin ancial Serv ices Tribunal must comply;12

publishing annual statement s of priorities for the coming f‌i scal year13

and other information th at it considers in the public interest;14 f‌i ling

annual and other reports on its affairs15 or concerning information

required by the Minister of Finance;16 recommending fees in relation

to matters under its jurisdiction;17 and recommending to the Lieuten-

ant Governor in Council, on request, the manner in which reg ulations

made under the FSCO Ac t should determine the sh are of assessment s in

respect of a regulated sector and t he share of the asses sment payable by

an entity that forms part of the sector.18 The FSCO board is f‌i nancially

accountable to the Provincial Auditor, who is required to examine an-

nually the board’s accounts and f‌i nancial 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 dam ages “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 being required to testi fy in a civil proceeding, in a

10 Ibid., s. 3(b).

11 Ibid., s. 3(c).

12 Ibid., s. 9(1). FSCO has establishe d such conf‌l ict of i nterest guidelines and is

required to del iver a copy of them to the Minister of Fi nance: FSCO Act, ibid., s.

9(2).

13 Ibid., s. 11(1). This must delivered to t he Minister of Finance and publi shed

in The Ontario Gazette at lea st nine months before the sta rt of each f‌i scal year.

Also, at least si xty days before publicat ion, a notice must be published in The

Ontario Gazette i nviting “intereste d persons” to make writt en representations as

to the matters t hat should be identif‌i ed as priorit ies: FSCO Act,ibid., s. 11(2).

14 Ibid., s. 11(3).

15 Ibid., s. 15(1). The annual report must be f‌i led w ithin a reasonable time a fter the

close of each f‌i sca l year. The Minister shall submit t he report to the Lieutenant

Governor in Counc il and lay it before the Legisl ative Assembly if it is in s ession

or, if not, at the next ses sion: FSCO Act,ibid., s. 15(2).

16 Ibid., s. 15(3).

17 Ibid., s. 27(1).

18 Ibi d., s. 25(6).

19 Ibi d., s. 14.

20 Ibid., s. 10(1).