Citation: Kumar v. Ontario (Superintendent Financial Services), 2019 ONFST 12 FST File No. P0815-2018 Date: 2019/06/14

IN THE MATTER OF the Pension Benefits Act, R.S.O. 1990, c.P.8, (“the Act”) as amended;

AND IN THE MATTER OF a Notice of Intended Decision of the Superintendent of Financial Services to Refuse to Make an Order under section 87 of the Act relating to the Public Service Pension Plan, Registration Number 0208777;

AND IN THE MATTER OF a Hearing in accordance with subsection 89(6) of the Act.

and

BEFORE:

Paul Farley Chair of the Panel and Member of the Tribunal

Caroline Hunt Member of the Panel and Member of the Tribunal

Jeffrey Richardson Member of the Panel and Member of the Tribunal

For the Applicant – self represented

For the Superintendent of Financial Services – Deborah McPhail, Barbara Austin

For the Ontario Pension Board (“OPB”) – Rachel Saab, Daniel Parkinson

DATE HEARD: May 14, 2019

1The parties are advised that effective June 08, 2019 the Financial Services Commission of Ontario (“FSCO”) is transitioning into a new regulatory body called the Financial Services Regulatory Authority (“FSRA”). Following June 08, 2019, the CEO of FSRA will assume all of the Superintendent's existing regulatory and enforcement responsibilities under the new FSRA Act and will, through the legislation, automatically replace the Superintendent as a party to this proceeding. This was reflected not only in the PHC Memo but also in my opening remarks at the hearing and in the panel's written decision following the conclusion of the hearing.

2Since March 1, 2012, Atul Kumar has been employed with the Canada Revenue Agency (“CRA”). He had previously been employed with the Ontario Ministry of Revenue and transferred his employment to CRA when, because of the divestment to the CRA of certain functions previously performed by the Ontario Ministry of Revenue with respect to the collection and administration of sales tax, his Ontario Ministry of Revenue employment ended.

3Mr. Kumar, in a Request for Hearing filed with the Registrar, has asked the Tribunal to intervene in a Notice of Intended Decision (“NOID”) issued by the Superintendent to “…refuse to make an Order pursuant to section 87 of the PBA requiring the Ontario Pension Board (the “OPB”) to pay the Applicant such part of the commuted value of the Applicant’s pension benefits that was not transferred to the Public Servants Superannuation Plan (the “Federal Plan”).”

4After hearing the submissions of Mr. Kumar and the submissions of counsel for the Superintendent and counsel for the OPB, having reviewed the materials filed, the Tribunal has decided not to intervene in the NOID of the Superintendent and hereby orders the Superintendent to carry out the Intended Decision. Our reasons follow.

II. Facts

5The facts in this case were not in dispute. The Parties had entered an agreed statement of facts (“agreed statement”) which shortened the proceeding considerably.

6Beginning February 14, 2000, Mr. Kumar was enrolled in the Public Service Pension Plan (the “Provincial Plan”). He continued as a member of the Provincial Plan until his employment with the Ontario Ministry of Revenue ended. The Provincial Plan is subject to the provisions of the Ontario Pension Benefits Act (the “Act”). The Ontario Pension Board (“OPB”) is the administrator of the Provincial Plan.

7On March 1, 2012, when Mr. Kumar became an employee of CRA, he also became a member of the federal Public Service Pension Plan (the “Federal Plan”). The Federal Plan is subject to the provisions of the Public Service Superannuation Act, a federal statute. Administration of the Federal Plan is performed by the Government of Canada Pension Centre (the “Pension Centre”).

8On May 23, 2012, OPB sent a letter to the Applicant advising that he could transfer and consolidate his pension benefits in the Federal Plan.

9On April 19, 2013, a representative from the Pension Centre sent the Applicant the election form which was required to transfer his pension benefits from the Provincial Plan to the Federal Plan. Mr. Kumar was told that the election form must be returned to the Pension Centre no later than July 18, 2013, with a copy to be sent to OPB. Mr. Kumar did not return the form by July 18, 2013.

10On December 31, 2013, approximately five and one half months after the deadline for filing the election form, OPB wrote to the Applicant advising that because the Pension Centre did not receive the Applicant’s election form by July 18, 2013, his pension benefits would remain in two separate pension plans.

A. Mr. Kumar’s Rationale for Declining to Transfer

11As noted in the agreed statement, Mr. Kumar declined the transfer opportunity because he was not offered the same terms of transfer that were offered to plan members who were under the age of 55.

12For Plan members under the age of 55, the commuted value was used as the OPB Transfer Amount and, in cases where this amount was greater than the Federal Transfer Amount, the member was paid the excess commuted value. For Plan members 55 and over, like Mr. Kumar, the OPB Transfer Amount was not the commuted value but rather a lesser amount calculated in “Appendix B1” which provided the estimated amount that would be transferred from the Provincial Plan to the Federal Plan. In addition, there was no excess commuted value payout to members 55 and over.

13Although Mr. Kumar missed the pension transfer opportunity deadline he requested the OPB, many times in 2013, to transfer the commuted value amount (instead of the Appendix B1 amount).

B. Discussions Between the OPB and Treasury Board of Canada Secretariat

14Notwithstanding the fact that the opportunity given to the Applicant to transfer the Provincial Plan to the Federal Plan had expired, the Superintendent became involved and, as a result of that involvement, the OPB and the Treasury Board of Canada Secretariat had discussions about the possibility of reopening the opportunity to the Applicant to transfer benefits from the Provincial Plan to the Federal Plan on terms that were more advantageous to Mr. Kumar than previously offered.

15On September 9, 2016, a representative of the Superintendent wrote to Mr. Kumar regarding the transfer option and explained that OPB and the Treasury Board of Canada Secretariat were having discussions on potentially reopening the opportunity to transfer pension benefits from the Provincial Plan to the Federal Plan for certain members that included the Applicant.

16On February 3, 2017, OPB wrote to Mr. Kumar advising that an agreement had been reached to reopen the transfer opportunity.

17On April 20, 2017, the transfer opportunity was reopened to Mr. Kumar and others. At that time Mr. Kumar was provided an amended Appendix B1 and advised that the form must be returned by the deadline of July 19, 2017.

18The agreement reached between the OPB and the Treasury Board of Canada Secretariat provided that, for members 55 and over, like Mr. Kumar, they would be permitted to transfer the commuted value of their pensions, the same arrangement that had been made with plan members under 55. However, plan members 55 and over, unlike those under 55, would not be paid the excess commuted value of their pensions. In Mr. Kumar’s case the excess commuted value was approximately $109,000.

19It became apparent, during the course of argument, that the basis for reopening the transfer opportunity, at least in part, was the realization on the part of the administrators of the Provincial Plan and the Federal Plan (as a result of the involvement of the Superintendent it seems) that members of the Provincial Plan were not entitled to transfer the commuted value of their pension pursuant to section 42(1) of the Act nor to the excess commuted value to be paid out to them because, by virtue of section 80(3) of the Act, they were deemed not to have been terminated by the change of employer and therefore they were not former members of the Provincial Plan.

20By offering members 55 and over a further opportunity to transfer from the Provincial Plan to the Federal Plan at the commuted value of the Provincial Plan the administrators of the plans would redress, in part, the mistake made in treating members under 55 differently than members 55 and over.

21On July 17, 2017, Mr. Kumar elected not to transfer his pension to the Federal Plan because, unlike the previous offer made to plan members under 55, he would not receive the excess commuted value.

22On July 19, 2017, the window for Mr. Kumar to transfer his pension to the Federal Plan closed.

III. The Issues

23The issues were agreed upon by the Parties at the Pre-Hearing Conference:

a) Should the Superintendent make an order that the OPB transfer the pension of the Applicant to the Federal Public Service Pension Plan?

b) If the answer to issue (a) is yes, should the Superintendent order that the Applicant be paid the excess commuted value of the pension?

c) Does the Tribunal have jurisdiction to make the orders identified in issues (a) and (b)?

IV. THE POSITIONS OF THE PARTIES

24The position of Mr. Kumar is clear. He believes that he, and other Provincial Plan members 55 and over, have been treated unfairly because they have not been provided the same benefits in transferring their pension to the Federal Plan as members under age 55. That is, those 55 and over should be entitled to, not only transfer the commuted value of their Provincial Plan to the Federal plan, but also receive the excess commuted value of their Provincial Plan.

25Simply put, Mr. Kumar wishes to be provided the same opportunity as given to members under 55.

26Mr. Kumar’s position that he was treated unfairly appears to be supported, in part, by the Financial Services Commission of Ontario (“FSCO”). FSCO wrote to OPB on December 5, 2014 to advise of its view that the Pension Transfer Agreement required that the OPB Transfer Amount for all members subject to the HST Divestment be the greater of the amount calculated using the methods and assumptions contained in “Appendix C” and the commuted value of the members’ Ontario PSPP pension. Further, FSCO advised OPB that no excess commuted value was payable to members who transferred their pension from the Ontario PSPP to the Federal Plan whether they are 55 and over or under 55.

27The position of the OPB in this case is multilayered. First, they say that the window given to Provincial Plan members to transfer to the Federal Plan has closed.

28Second the OPB takes the position that neither the Superintendent, nor this Tribunal, have jurisdiction to make the Order requested. The Superintendent cannot require the Federal Plan, over which it has no jurisdiction, to accept a transfer of the Provincial Plan to the Federal Plan. This Tribunal cannot order the Superintendent to do something not within the jurisdiction of the Superintendent to do. The OPB submits that the Tribunal is a statutory body that has only the jurisdiction conferred on it by statute. Unlike the superior courts, a statutory tribunal has no inherent jurisdiction.

29The Superintendent adopts the position and argument of the OPB and argues further that neither the Superintendent nor the Tribunal have authority to order a plan sponsor to re-open a transfer opportunity that is not mandated by the Act or the plan in question.

V. Analysis

30The answer to the last issue, issue (c), in our view disposes of this Request for Hearing. While the Tribunal understands why Mr. Kumar believes he has been treated unfairly we accept the position of counsel for the OPB and the Superintendent that the Tribunal has no jurisdiction to grant the relief requested. As noted in Baxter v. Ontario (Superintendent Financial Services)¹

Unlike a superior court, this Tribunal has no inherent jurisdiction. It is simply a creature of statute (namely the Financial Services Commission of Ontario Act, 1997, c.28 (the “FSCO Act”), see esp. section 6) and derives its authority from statute, namely the FSCO Act and statutes such as the PBA that govern particular financial service sectors…

31Neither FSCO, nor the Superintendent have jurisdiction over the Federal Government or over the Federal Plan. They cannot require the Federal Government or the Federal Plan to accept a transfer of the Ontario Plan benefits held by Mr. Kumar. As stated in Kerry (Canada) Inc. v. Ontario (Superintendent Financial Services)² this Tribunal can only order the Superintendent, and not others, to do something. If the Tribunal considers ordering the Superintendent to do something it must first be certain that the Superintendent has the authority.

32Mr. Kumar is, essentially, asking the Tribunal to order the Superintendent to require the OPB to transfer his Ontario Plan to the Federal Plan when there is no jurisdiction in the Superintendent or the OPB to require the Federal Plan to accept the transfer. As a result, we have decided that we have no jurisdiction to make the order requested.

33Considering our finding in this regard the second issue, should the Superintendent order the excess commuted value be paid to Mr. Kumar, becomes moot and need not be addressed. The payment of excess commuted value would only have to be determined on the transfer of the Provincial Plan to the Federal Plan.

A. Repayment of Excess Commuted Value Received by Ontario Plan Members Under 55

34During oral argument and in his written reply argument Mr. Kumar raised a new issue. In the event the Tribunal declined to make the order requested, he asked that the Tribunal require the Superintendent to issue an Order to the OPB that the payment of the excess commuted value to members of the Provincial Plan under 55 be corrected by seeking repayment of the excess amounts paid. Mr. Kumar argued that this mistake has a significant negative financial impact on the Plan in which he has a vested interest.

35There was agreement amongst the Parties that the payment of excess commuted value to Provincial Plan members under 55 was not in accordance with the Act. This payment was made in error.

36In declining to make the alternate order requested the Tribunal had regard to the argument of both the Superintendent and the OPB that the new issue raised most affected the persons who received the payment, and those persons had not been given notice of this proceeding.

37In addition the Tribunal had regard to the powers given to it under section 89(9) of the Act which states: “[89(9)] At or after the hearing, the Tribunal by order may direct the Superintendent to make or refrain from making the intended decision indicated in the notice and to take such action as the Tribunal considers the Superintendent ought to take in accordance with this Act and the regulations, and for such purposes, the Tribunal may substitute its opinion for that of the Superintendent.” (underlining added) It is our view that we are entitled to make an order that relates to the NOID. The alternate order requested by the Applicant does not relate to the NOID filed in evidence.

VI. ORDER

38The request of the Applicant set out in the Applicant’s Request for Hearing is denied and the Superintendent is hereby Ordered to carry out the NOID.

Dated at Toronto, this 14th day of June, 2019.

“Paul Farley” Paul Farley

“Caroline Hunt” Caroline Hunt

“Jeffrey Richardson” Jeffrey Richardson

Footnotes

2002 ONFST 12
2004 ONFST 5, p.7