FSCO releases guideline for administrative penalties under pension act

The Financial Services Commission of Ontario has released its guideline for administrative penalties related to violations of the province’s Pension Benefits Act.

The change was introduced at the beginning of 2018, with the superintendent given the authority to impose monetary penalties for certain violations of the act and its regulations. Unlike a fine, these penalties have no criminal element and are instead meant to promote compliance rather than punishment.

The administrative penalties expand the enforcement options available for the FSCO to regulate pension plans in the province, but don’t create new or increased requirements for compliance. They fall under two categories: general administrative penalties and summary administrative penalties, which apply to late regulatory filings and have set daily penalties.

Read: Incoming monetary penalties for Ontario pensions put spotlight on plan governance

Both groups of penalties are subject to the same maximums, up to $10,000 for an infraction or failure to comply by an individual and up to $25,000 for a person other than an individual, such as an organization. The penalties can be handed down on their own or in tandem with other regulatory measures under the act. However, the superintendent has the discretion to decide what course of action and regulatory measures to pursue, according to the FSCO.

It recommends pension plan administrators and their agents make note that an administrative penalty can’t be paid from the pension fund.

Read: Plan sponsors face new monetary penalties under Ontario pension changes

In terms of appealing a decision, there’s a 15-day limit to request a hearing before the financial services tribunal for a general administrative penalty and a 15-day limit to make a written submission to the superintendent regarding why a summary administrative penalty shouldn’t be imposed. If the superintendent does issue a summary penalty, there’s another 15-day time limit to appeal the order before the tribunal.

Administrative penalties will also be publicly reported on the FSCO website.