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The Financial Services Tribunal (“FST”) of B.C. published its final decision in a matter between BCFSA’s Superintendent of Pensions (the “Superintendent”) and the Board of Trustees of the IWA – Forest Industry Pension Plan (the “Plan”).
In March 2021, the Plan submitted an amendment to its plan text that imposed a benefit reduction on the active members of a withdrawing employer from the Plan, without reference to the funding status of the Plan.
The Superintendent refused to register the proposed amendment, finding that the amendment did not comply with the Pension Benefits Standards Act (“PBSA”) and Pension Benefits Standards Regulation (“PBSR”). The Superintendent subsequently affirmed his decision that Section 93 of PBSA speaks to the “consequences to the funding of benefits” and not to the benefits that are payable.
Subsequently, the Plan filed an appeal to the FST with regards to the Superintendent’s decision. On May 26, 2023, the FST dismissed the appeal and upheld the Superintendent of Pensions’ decision not to register the amendment and to direct that the Plan’s existing employer withdrawal provisions be amended.
“I find that the amendment is not compliant with the PBSA and PBSR”, said Stacey Robertson, Chair of FST, in the decision. “Section 93 does not give […] discretionary authority to reduce pension benefits simply by virtue of the member being an employee of a withdrawing employer without any actuarial evidence of a solvency issue.”
Although the FST noted that consequences must first be decided upon in order to be specified in a plan text, it cautioned that a decision in relation to Section 93 must also be compliant with the statutory scheme.
Financial Services Tribunal Decision – Board of Trustees of the IWA – Forest Industry Pension Plan v. Superintendent of Pensions
BC Financial Services Authority (“BCFSA”) is a Crown regulatory agency of the Government of British Columbia. BCFSA oversees the financial services sector which includes pension plans, mortgage brokers, real estate services, real estate development marketing, and financial institutions (credit unions and insurance and trust companies). BCFSA also administers the Credit Union Deposit Insurance Corporation of British Columbia (“CUDIC”).