Federally Regulated Plans Opting Out of Grow-In Benefits for Ontario Members

In addition to having members who are employed in “included employment”, as defined in subsection 4(4) of the PBSA, some federally regulated pension plans also cover members who are not employed in “included employment.” These types of plans are known as multi-jurisdictional pension plans. In accordance with section 28 of the PBSR, these plans include members’ benefits which are subject to the provisions of the applicable provincial pension legislation (e.g. the Ontario Pension Benefit Act (PBA)).

The Ontario PBA was amended on July 1, 2012 such that, subject to certain limited exceptions, grow-in benefits must be provided to every member whose employment is terminated on or after July 1, 2012.

A provision has been added to section 74.1 of the Ontario PBA to allow employers and the members of jointly sponsored pension plans (JSPPs) and administrators of multi-employer pension plans (MEPPs) to opt out of providing grow-in benefits to their members. The Ontario PBA Regulation provides that existing JSPPs and MEPPs, as at July 1, 2012, will have until July 12, 2013 to opt out of the grow-in benefit provisions.

Federally regulated multi-jurisdictional pension plans may be subject to these provisions. Plan administrators should contact the Financial Services Commission of Ontario for further information or visit their website.