Section 101.1 of the Pension Benefits Act (PBA) came into force on December 8, 2020.

Under section 101.1 of the PBA, if certain conditions are met, the employer of a pension plan that is an individual pension plan (IPP) or a designated plan (DP) for the purposes of the Income Tax Act (Canada) can elect that the plan be exempt from the application of the PBA, the regulations made under the PBA and the rules made by the Financial Services Regulatory Authority of Ontario (FSRA) under the PBA (except as necessary to give effect to section 101.1).

The employer can only make the election, and the exemption is only effective, if:

  1. every member of the IPP or DP, if any, is connected with the employer within the meaning of subsection 8500(3) of the Income Tax Regulations (Canada) (ITR);
  2. every former member of the IPP or DP, if any, and every retired member of the IPP or DP, if any, was connected with the employer within the meaning of subsection 8500(3) of the ITR immediately before becoming a former member or retired member, as the case may be;
  3. the employer of the IPP or DP files an election with FSRA by filing a completed and signed Form 15 – PBA Exemption Election Form, accompanied by a copy of every consent form (described below) that is required to be filed with the Form 15;
  4. the date on which the exemption will become effective, as set out in the Form 15 filed with FSRA, is at least 14 days, but no more than 60 days, after the date on which the completed Form 15 and the required consent forms (described below) have been filed with FSRA; and
  5. the following individuals related to the IPP or DP consent to the employer’s election by completing and signing the relevant consent forms (described below) and the employer files those consent forms with FSRA:
    • every member, former member, retired member of the IPP or DP (using a Form 15.1 – Consent Form: Member for each such person; note that if the member, former member or retired member wishes to give their consent to the employer’s election, they must also provide a declaration about their spousal status, as set out in the Form 15.1)
    • every spouse of every member, former member or retired member of the IPP or DP who is not living separate and apart from the member, former member or retired member, and who is not themself also a member, former member or retired member of the IPP or DP (using a Form 15.2 – Consent Form: Spouse for each such person); and
    • any other person entitled to pension benefits under the IPP or DP, other than those described above (using a Form 15.3 – Consent Form: Other Person for each such person).

In order to facilitate the employer election, consents and declarations required by section 101.1 of the PBA, the following forms must be used by the employer of the IPP or DP to make the election and to obtain the consents of the individuals noted in e) above:

Form 15 – PBA Exemption Election Form
This form must be used by the employer of an IPP or DP to elect that the plan be exempt from the application of the PBA, regulations made under the PBA and rules made by FSRA under the PBA (except as necessary to give effect to section 101.1 of the PBA). A copy of every consent and declaration (using the consent forms described below) required by section 101.1 of the PBA must be filed with the completed and signed Form 15 and forms part of the employer’s election.

Form 15.1 – Consent Form: Member
If a member, former member or retired member of an IPP or DP wishes to consent to the employer’s election to exempt the IPP or DP from the application of the PBA, regulations made under the PBA and rules made by FSRA under the PBA, this form must be used to give their consent.

Please note that in addition to completing and signing the necessary parts of the Form 15.1, the member, former member or retired member of the IPP or DP must also make a declaration on the Form 15.1 regarding their spousal status. This declaration must be made and completed by the individual before a Commissioner for Oaths or another person authorized under the Evidence Act to take such a declaration.

Individuals completing the Form 15.1 may want to ask the employer or the administrator of the IPP or DP to assist them in determining how the declaration regarding their spousal status can be made in the current pandemic situation. For example, the Law Society of Ontario has issued guidance to lawyers and paralegals regarding the remote commissioning of documents.

Form 15.2 – Consent Form: Spouse
If the spouse of a member, former member or retired member of an IPP or DP who is not living separate and apart from the member, former member or retired member, and who is not themself a member, former member or retired member of the IPP or DP, wishes to consent to the employer’s election to exempt the IPP or DP from the application of the PBA, regulations made under the PBA and rules made by FSRA under the PBA, this form must be used to give their consent.

Form 15.3 – Consent Form: Other Person
If a person (other than a person described above) who is entitled to pension benefits under the IPP or DP, wishes to consent to the employer’s election to exempt the IPP or DP from the application of the PBA, regulations made under the PBA and rules made by FSRA under the PBA, this form must be used to give their consent.

If the employer’s election satisfies the requirements of section 101.1 of the PBA, the exemption will take effect on the date set out in the Form 15 that has been filed by the employer with FSRA. This means that as of that date:

  • the PBA, the regulations made under the PBA and the rules made by FSRA under the PBA will cease to apply to the IPP or DP and all the individuals and entities related to the plan (including the employer, the plan administrator, the plan members, former members and retired members, their spouses and anyone else entitled to pension benefits under the IPP or DP), except as necessary to give effect to section 101.1 of the PBA;
  • any matters pending before FSRA in relation to the IPP or DP will cease to be subject to FSRA’s regulatory oversight under the PBA; and
  • no person can become a new member of the IPP or DP after the Form 15 is filed by the employer with FSRA, unless the person is connected with the employer within the meaning of subsection 8500(3) of the ITR on the day the person becomes a member of the IPP or DP.