Ontario’s Pension Benefit Act Amended to Impose Administrative Monetary Penalties Effective January 1, 2018

Ontario’s Pension Benefit Act (PBA) was amended to give the Superintendent of Financial Services the authority to impose Administrative Monetary Penalties for breaches of the PBA.

In September 2017, the Ontario government finalized the amendment to Regulation 909 under the PBA to come into force effective January 1, 2018. The new administrative penalties suggest the importance of regulatory compliance in Ontario for plan sponsors, administrators and third-party providers.

The Superintendent shall levy a general or summary administrative penalty on a person (such as the plan sponsor or plan administrator).  General Administrative Penalties are imposed on more severe violations of the PBA, such as failure to administer a plan in accordance to its plan document.  Summary Administrative Penalties are imposed on more procedural violations, such as late filings of the Annual Information Return. Both general and summary administrative penalties are subject to maximum penalty limits of $10,000 against a person/individual, and $25,000 against a corporation or other legal entity. Administrative penalties cannot be paid from the pension fund.

In order for the Superintendent to impose the penalty, there are a number of safeguards that must be considered, which are dependent on the type of penalty. General administrative penalties require the Superintendent to give notice of the intention to levy the administrative monetary penalty, allowing the person 15 days to request a hearing. Summary administrative penalties require the Superintendent to issue the order allowing the person 15 days to appeal.

With the Administrative Monetary Penalty provision coming January 1, 2018, pension plan sponsors, administrators and third-party providers should do what they can to prepare for the new regime. Those involved in pension plan administration should ensure they understand the new regime, confirm that compliance and procedures are in accordance to the PBA, be aware of filing deadlines, and review third party contracts regarding liability for errors.

For additional information on Administrative Monetary Penalties, please visit FSCO’s website.

 

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2018 YMPE Announced

On November 1st, Canada Revenue Agency announced that the maximum pensionable earnings for 2018 will be $55,900, up from $55,300 in 2017.

Contributors who earn more than $55,900 in 2018 are not required or permitted to make additional contributions to the Canada Pension Plan.

The basic exemption amount for 2018 remains $3,500.

The 2018 contribution rate for employees and employers remain unchanged at 4.95%.

The 2018 contribution rate for self-employed will also remain unchanged at 9.9%.

The 2018 maximum employer and employee contribution to the plan will be $2,593.80, up from $2,564.10 in 2017.

The 2018 maximum self-employed contribution will be $5,187.60, up from $5,128.20 in 2017.

Check out our website for a breakdown of these rates and others.

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