Who is responsible for regulating pension plans in Canada? Unlike most developed countries, Canada does not have a single pension regulator. Instead, each province has its own pension regulator, except Prince Edward Island, which has never enacted its pension legislation. Where a pension plan has members in more than one province, the regulator is the one for the province in which most active members are employed.
Canada has ten pension regulators – nine provincial and one federal. This is because the Canadian constitution says that workplace pensions fall under provincial jurisdiction, unless the employment itself is federally regulated. Banking, telecommunications and inter-provincial transportation are examples of federally regulated industries. The federal regulator for such industries – the Office of the Superintendent of Financial Institutions – is also the regulator of workplace pension plans in the Yukon, the Northwest Territories and Nunavut.
Further complicating things is that the Income Tax Act applies to all registered pension plans, which means they are also regulated by the Canada Revenue Agency (CRA).
The Financial Services Regulatory Authority of Ontario (FSRA) is the regulator of Ontario registered pension plans. FSRA’s job is to ensure that the pension plans it regulates comply with Ontario’s Pension Benefits Act (PBA). The PBA requires pension plans to provide members with a minimum level of entitlements. Those entitlements include rules about what information must be provided to members and beneficiaries, when and how former members can transfer their benefits out of a pension plan, rules requiring the locking-in of pension benefits so they are used for retirement, rules setting out who is entitled to a death benefit, as well as minimum funding rules and various reporting requirements. FSRA also provides the documentation used to divide pension benefits following the termination of a spousal relationship.
The CRA is concerned with ensuring that registered pension plans comply with the income tax rules so that the tax advantages of registered pension plans are not misused. These tax advantages include that contributions by employers and employees are tax deductible, that income generated by the investment of pension plan assets is tax exempt, and that the taxation of pension benefits will be deferred until the benefits are received by members. The Income Tax Act also caps the amount an employer can deduct from its income for pension contributions and the maximum pension each member can receive.
Pension plan members who have a complaint about their pension plan can take it to FSRA which may assign a pension officer to assist them (the FSRA website includes the process for filing such a complaint). However, a complaint to FSRA must relate to an alleged breach of the PBA. If it does not, the complainant will have to seek redress in another forum such as in the courts, before the labour board, or through the grievance and arbitration process in their collective agreement.
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