Plan Expenses – When Can They Be Paid Out Of The Pension Fund?

Originally published in Pensions International, February 2007.

The issue of who pays pension plan expenses has been a hot topic of Canadian pension law over the past few years, with much uncertainty over which expenses can be charged to a pension fund. The increasing cost of pension plan administration has led employers that both sponsor and administer registered pension plans to increasingly use fund assets to pay for the expenses incurred in maintaining the plan. Unfortunately, a detailed list of permissible chargeable expenses applicable to all registered pension plans does not exist.

The confusion surrounding the source of payment for plan expenses leads many employers to question exactly which rules govern the payment of plan expenses from plan assets. The use of plan assets is governed by the applicable pension legislation and by equitable legal principles. This article refers to the provisions of the Ontario Pension Benefits Act (PBA), since its provisions are representative