Tribunal imposes two-year watch after employer repeatedly pockets pension funds
Ontario’s Financial Services Tribunal rules on 13 October 2026 that a Burlington equipment company breached its fiduciary duty to 11 pension plan members by repeatedly failing to remit contributions. Panel chair Ian McSweeney handed down the decision in Higginson Equipment Inc. v. Ontario (CEO of FSRA), 2026 ONFST 17.
Higginson Equipment Inc. sponsored a single-employer defined contribution pension plan established around 2010. Between January 2023 and March 2024, the company failed to remit roughly $35,000 in employer and employee contributions to the plan custodian. Both the custodian and the Financial Services Regulatory Authority of Ontario sent repeated communications demanding compliance. The company largely did not respond.
FSRA issued a regulatory order in August 2024 and sent staff to the company’s office to hand-deliver it. A warning letter followed in November 2024 after arrears were cleared on 31 October 2024. FSRA placed the plan on active monitoring and offered governance assistance. The company did not respond.
Pension funds treated as company cash
Between May and September 2025, the company again fell behind on roughly $1,900 per month, attributing the delay to a banking transition from TD Bank to CIBC. A plan custodian representative testified that the company’s accounts occasionally held insufficient funds to meet obligations. The company denied solvency problems.
FSRA issued two notices of intended decision on 1 October 2025: one proposing to wind up the plan and another proposing $19,000 in administrative penalties. The company remitted the outstanding $9,500 two days later, and FSRA reduced the penalties to $9,500. The tribunal found that employee and employer contributions held in the company’s general operating account constituted trust property. “The Applicant essentially borrowed the funds from its employees/the Plan without the employees’ prior knowledge or consent and used the funds as part of its general operating assets,” the tribunal held.
The tribunal rejected the argument that repayment with interest negated the harm. “The fact that the delinquent contributions were later fully paid to the Plan custodian with interest does not alter the harm and risk to which the Plan beneficiaries were exposed during the periods of delinquency,” the panel found. Delayed remittance denied members potential investment returns and exposed them to insolvency risk.
Two years on a short leash
The tribunal upheld the $9,500 in penalties, finding the company’s contraventions were a mix of intentional and unintentional conduct that was “also occasionally negligent and even reckless.” Non-compliance stretched across three distinct periods from January 2023 to March 2026, and the company continued to miss deadlines even after FSRA issued the October 2025 notices. October 2025 contributions arrived 52 days late; November 2025 contributions were 21 days late; January 2026 contributions were 11 days late.
FSRA argued that wind-up was the only remedy for the company’s “repeated inability to adequately administer the Plan.” The company countered that winding up a fully solvent plan would harm the 11 members by stripping them of their workplace retirement benefit and disrupting their long-term financial security. The tribunal declined to order wind-up, finding the risk of future delinquencies acceptably low given the company’s full compliance since March 2026, its steps to address past accounting and banking issues, and a credible commitment to ongoing compliance.
Instead, the tribunal imposed a two-year supervisory regime requiring the company to report each remittance to FSRA, file monthly contribution reports, notify FSRA of staffing changes in plan administration, and give FSRA-approved written notice to members of any breach. The company’s president provided a personal undertaking to ensure compliance. “Ordering the termination of the Plan actively prejudices the 11 employee members and would deprive active employees of their ongoing workplace pension benefits with no guarantee that their employer would establish a replacement retirement savings plan,” the tribunal found.
