The Financial Services Commission of Ontario is proposing to revoke the registration of the Canadian Corporation Creation Center Pension Plan. David Gordon, FSCOÕs deputy superintendent, pension division, will act as the administrator of the pension plan.

These steps were taken, says Gordon, because this pension plan does not have a properly constituted administrator. There were a number of recent activities of the plan that appear to contravene the legislative requirements of the Ontario Pension Benefits Act, he says.

When the CCCC Pension Plan was established in November 2000, it appeared to be a typical pension plan arrangement operating in compliance with the Act, says FSCO. However, subsequent inquiries indicated that it and NBI Trust, a related company, were participating in a scheme to systematically unlock monies locked-in under the Act. The scheme took advantage of people in financial difficulty by lending them their own money and taking a significant percentage of the locked-in account as a fee.

People who answered ads placed in local newspapers were told that they would receive a loan in return for a fee and a percentage of the value of their locked-in pension funds held in a Locked-in Retirement Account, Life Income Fund or Locked-in Retirement Income Fund. The fees typically exceeded 30% of the assets of the locked-in amount. The individual was asked to sign papers transferring their locked-in accounts to the CCCC Pension Plan. In exchange, the individual received a portion of the value of their locked-in amount as a loan. The remaining amounts were paid to CCCC as their fee. The total monies from the locked-in account were subsequently paid out.

Gordon advises that if someone is facing financial hardship and has a locked-in retirement account, FSCO will provide information on how to unlock these funds – if the applicants fall within the permitted grounds set out under the Pension Benefits Act.