Within Canadian law, Pension regulation in Canada falls mostly within provincial jurisdiction by virtue of the property and civil rights power under the Constitution Act, 1867 . For workers whose employers are subject to federal jurisdiction, such jurisdiction extends to regulating pension plans available to them.
The Pension Benefits Act is administered by the Superintendent of Financial Services appointed by the Financial Services Commission of Ontario. Ontario regulates approximately 8,350 employment pension plans, which comprise more than 40 per cent of all registered pension plans in Canada [1]
It was originally enacted as the Pension Benefits Act, 1965 (S.O. 1965, c. 96), and it was the first statute in any Canadian jurisdiction to regulate pension plans. [2]
| Sections | Description |
|---|---|
| (1-1.1) | Interpretation |
| (2-5.1) | Application |
| (6-24) | Registration and administration |
| (24.1-30.1) | Record keeping and disclosure |
| (31-34) | Membership |
| (35-38) | Retirement |
| (39-54) | Benefits |
| (55-62.1) | Contributions |
| (63-67) | Locking in |
| (67.1-67.6) | Family law matters |
| (68-77) | Winding up |
| (77.1-77.10) | Transition - partial wind up |
| (77.11-79.0.1) | Surplus |
| (79.1-81) | Asset transfers between pension plans |
| (81.1) | Insolvency and bankruptcy |
| (82-86) | Pension Benefits Guarantee Fund |
| (87-88) | Superintendent's orders |
| (89-91) | Notices of, and appeals from, intended decisions and orders |
| (95-99) | Financial Services Commission of Ontario |
| (100-101) | Agreements with designated jurisdictions |
| (102) | Exemptions and special arrangements |
| (103-116) | General |
In addition to registration requirements under the Income Tax Act relating to eligibility of expenses and deductions that are administered by the Canada Revenue Agency, plans are registered in the host jurisdiction as follows:
In the United States, a 401(k) plan is an employer-sponsored, defined-contribution, personal pension (savings) account, as defined in subsection 401(k) of the U.S. Internal Revenue Code. Periodic employee contributions come directly out of their paychecks, and may be matched by the employer. This pre-tax option is what makes 401(k) plans attractive to employees, and many employers offer this option to their (full-time) workers. 401(k) payable is a general ledger account that contains the amount of 401(k) plan pension payments that an employer has an obligation to remit to a pension plan administrator. This account is classified as a payroll liability, since the amount owed should be paid within one year.
A pension is a fund into which amounts are paid regularly during an individual's working career, and from which periodic payments are made to support the person's retirement from work. A pension may be:
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Canadian securities regulation is managed through the laws and agencies established by Canada's 10 provincial and 3 territorial governments. Each province and territory has a securities commission or equivalent authority with its own provincial or territorial legislation.
The Employee Retirement Income Security Act of 1974 (ERISA) is a U.S. federal tax and labor law that establishes minimum standards for pension plans in private industry. It contains rules on the federal income tax effects of transactions associated with employee benefit plans. ERISA was enacted to protect the interests of employee benefit plan participants and their beneficiaries by:
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The Pension Benefit Guaranty Corporation (PBGC) is a United States federally chartered corporation created by the Employee Retirement Income Security Act of 1974 (ERISA) to encourage the continuation and maintenance of voluntary private defined benefit pension plans, provide timely and uninterrupted payment of pension benefits, and keep pension insurance premiums at the lowest level necessary to carry out its operations. Subject to other statutory limitations, PBGC's single-employer insurance program pays pension benefits up to the maximum guaranteed benefit set by law to participants who retire at 65. The benefits payable to insured retirees who start their benefits at ages other than 65 or elect survivor coverage are adjusted to be equivalent in value. The maximum monthly guarantee for the multiemployer program is far lower and more complicated.
Superannuation in Australia, or "super", is a savings system for workplace pensions in retirement. It involves money earned by an employee being placed into an investment fund to be made legally available to members upon retirement. Employers make compulsory payments to these funds at a proportion of their employee's wages. From July 2024, the mandatory minimum "guarantee" contribution is 11.5%, rising to 12% from 2025. The superannuation guarantee was introduced by the Hawke government to promote self-funded retirement savings, reducing reliance on a publicly funded pension system. Legislation to support the introduction of the superannuation guarantee was passed by the Keating Government in 1992.
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The Pension Protection Act of 2006, 120 Stat. 780, was signed into law by U.S. President George W. Bush on August 17, 2006.
Self-funded health care, also known as Administrative Services Only (ASO), is a self insurance arrangement in the United States whereby an employer provides health or disability benefits to employees using the company's own funds. This is different from fully insured plans where the employer contracts an insurance company to cover the employees and dependents.
An individual pension plan or IPP is a Canadian retirement savings vehicle. An IPP is a one-person maximum defined benefit pension plan which allows the plan member to accrue retirement income on a tax-deferred basis. As such, an IPP must conform to the Canadian Income Tax Act (ITA) and regulations (ITR) as well as the requirements of the Canada Revenue Agency (CRA) with respect to defined benefit pension plans. It is possible for an IPP to be a combination plan offering both defined benefits and defined contribution pensions.
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Defined benefit (DB) pension plan is a type of pension plan in which an employer/sponsor promises a specified pension payment, lump-sum, or combination thereof on retirement that depends on an employee's earnings history, tenure of service and age, rather than depending directly on individual investment returns. Traditionally, many governmental and public entities, as well as a large number of corporations, provide defined benefit plans, sometimes as a means of compensating workers in lieu of increased pay.
The Autorité des marchés financiers is a self-funding government agency responsible for financial regulation in the Canadian province of Quebec. It regulates the province's financial markets and provides assistance to consumers of financial products and services. As provided for under its incorporating legislation, the AMF's mission is to enforce the laws governing the regulation of the financial sector, notably in the areas of insurance, securities, deposit institutions and the distribution of financial products and services.
Pensions in Canada can be public, private, and collective, or come from individual savings.
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Sun Indalex Finance, LLC v United Steelworkers, 2013 SCC 6, arising from the Ontario courts as Re Indalex Limited, is a decision of the Supreme Court of Canada that deals with the question of priorities of claims in proceedings under the Companies' Creditors Arrangement Act, and how they intersect with the fiduciary duties employers have as administrators of pension plans.
OPTrust, officially the OPSEU Pension Trust, is a legal trust formed by the contractual agreement between the two plan sponsors, Ontario Public Service Employees Union (OPSEU) and the Government of Ontario. It manages one of Canada's largest pension funds and administers the OPSEU Pension Plan. It is responsible for investing the plan's assets to support the cost of members' and retirees' pension benefits. It manages the fund for OPSEU members who are employed by the Government of Ontario and certain agencies, boards and commissions.
