Regulator flags $9,500 gap in member contributions and plans $19,000 in penalties
About $9,500 in unremitted pension contributions has prompted Ontario’s pension regulator to move toward a five-count administrative penalty order against Higginson Equipment Inc. over its single-employer defined contribution plan.
According to the Financial Services Regulatory Authority of Ontario (FSRA), both employer and employee contributions for April to August remain outstanding, in an “approximate total amount of $9,500.”
According to FSRA’s notice of intended decision, the head, Pension Plan Operations and Regulatory Effectiveness intends to levy five administrative penalties of $3,800 each, totalling $19,000, for failures to remit required contributions for each month from April through August 2025, contrary to section 4(4) of Regulation 909 under the Pension Benefits Act.
FSRA states that the missed remittances range from $1,895.30 to $1,901.52 per month over that period.
FSRA reports that Higginson Equipment Inc. sponsors and administers the Pension Plan for the Employees of Higginson Equipment Inc., a defined contribution pension plan with 13 members based on the last Annual Information Return filed July 9.
The regulator notes this is not the first remittance issue: between January 2023 and March 2024, Higginson failed to remit employer and employee contributions, leading to an August 13, 2024 regulatory order requiring all outstanding contributions with interest and a November 12, 2024 warning letter.
As per FSRA, the head considers the latest contraventions “intentional,” pointing to the prior order and warning letter and the lack of response to more recent communications from FSRA and the plan custodian.
FSRA characterizes the harm as “serious,” stating that the failure to remit promptly amounts to “misappropriation of the deferred compensation of Plan members” and may cause members to miss investment returns that would otherwise accrue to their accounts.
According to FSRA, approximately $4,750 in expected employee contributions “presumably withheld from employee compensation” has been held by Higginson Equipment Inc. and not remitted, and the regulator concludes the company has derived economic benefit from the failure to remit.
Under the notice, Higginson Equipment Inc. is entitled to request a hearing before the Financial Services Tribunal within 15 days of service of the document; if no hearing is requested, FSRA indicates an order will be issued as described.
