Jointly sponsored pension plan (JSPP)

A buyer reviewing an inherited pension arrangement may find a jointly sponsored plan, where the employers and the members, or their representatives, are jointly responsible for decisions about the plan. See what happens to the pension or benefits plan on a sale.

The Act’s characteristics

Under s.1(2) of the Pension Benefits Act, a plan is jointly sponsored if it provides defined benefits that are contributory, if its documents require members to contribute toward any going concern unfunded liability and reduced solvency deficiency, and if it satisfies additional prescribed criteria. Section 1(2.1) lets a plan that qualified on a stated date stay jointly sponsored even if amended so members need not contribute toward a reduced solvency deficiency.

What Regulation 909 adds

Section 3.1 of Regulation 909 requires, among other things, that by virtue of the plan documents the employers (or those contributing for or representing them) and the members (or their representatives) are jointly responsible for all decisions about the plan’s terms and amendments, and for appointing the administrator (or the members of a body that is the administrator). Section 3.2 requires the administrator to file a statement certifying that the plan meets the criteria.

Link to grow-in rights

Section 74.1 of the Act lets the employers (or those contributing for or representing them) and the members (or their representatives) of a jointly sponsored plan elect, within the prescribed period, to exclude the plan and its members from the grow-in rights in s.74. Ask whether an election was made and whether it has been rescinded. This entry covers Ontario only; check the rules where you are.