Can Ontario directors be personally liable for unpaid pension fund contributions?

Yes. Under Ontario's Pension Benefits Act, directors of an Ontario corporation that sponsors a registered pension plan can face personal liability for the corporation's failure to make required contributions to the pension fund. The liability applies when the corporation fails to remit employee contributions deducted from payroll and certain employer contributions required under the plan.

The structure mirrors other director liability regimes: the liability is joint and several, meaning each director can be individually responsible for the full amount outstanding. There are also potential liability implications under federal pension legislation if the plan is federally regulated, though most private-sector pension plans in Ontario are provincially regulated.

This form of liability is particularly significant because pension fund obligations can be substantial and ongoing. Directors of corporations sponsoring defined benefit pension plans — which carry ongoing actuarial obligations — should ensure they receive regular funding reports and understand the corporation's obligations. Where the corporation is financially stressed, pension contributions are frequently among the obligations that get deferred, which directly increases director risk. Directors who discover a corporation is falling behind on pension remittances should treat it as urgently as a payroll remittance failure and seek legal advice promptly.