On November 27, 2014, the Government of Ontario filed Ontario Regulation 235/14, which introduces changes to the existing regulations under the Pension Benefits Act (the “Act”).  These changes impose new requirements on plan administrators with respect to the disclose of information, “SIP&P” requirements, and commuted value transfers.

I. Former Members and Retirees Now Entitled to Biennial Statements

Effective January 1, 2015:

  • Plan administrators are now required to provide biennial statements to former and retired members, covering much of the same information as the annual statements to current members for pension Plans registered on or before January 1, 2015, the first of these statements must be provided no later than July 1, 2017.
  • For those pension plans registered after January 1, 2015, the first statement must be provided within 18 months after the end of the plan’s first fiscal year. Subsequent statements must be provided every two years, within six months after the plan’s fiscal year end.

II. New SIP & P Requirements

On January 1, 2016, new requirements related to a plan’s Statement of Investment Policies and Procedures (“SIP&P”) will come into effect:

  • SIP&Ps must include information about whether and how environmental, social and governance (“ESG”) factors are incorporated into the plan’s investment policies and procedures.
  • Plan administrators will be required to file the SIP&P. For most Ontario registered pension plans, SIP&P must be filed with FSCO by March 2, 2016 (60 days after January 1st). Any amendments to the SIP&P must be filed within 60 days of the amendment.
  • The regulations will be further amended to clarify that, although the assets of a pension plan must be invested in accordance with both the applicable SIP&P and federal investment regulations, wherever there is a conflict, the federal regulations will prevail.

III. New Information to be Included on all Member, Former Member and Retiree Statements

As of July 1, 2016, annual statements to members, as well as biennial statements to former and retired members, must disclose the following information:

  • that the plan administrator is required to establish a SIP&P in respect of the plan’s portfolio of investments and loans, and any information about incorporated ESG factors;
  • that the plan administrator is required to make the SIP&P available to members free of charge and will provide such copies by mail or electronically upon receipt of a written request; and
  • that members are entitled to inspect the most recent SIP&P at the office of the Superintendent of Financial Services and make a written request to have a copy provided by mail or electronically.

IV. Commuted Value Transfers Must be Administered in Accordance with PBA and Regs

  • The regulations have been amended to clarify that plan administrators may not transfer the commuted value of a pension or deferred pension into a prescribed retirement savings arrangement or for the purchase of a life annuity except where the transferee agrees to administer the amount according to the Act and its regulations.

Many thanks to Jennifer Bernardo for her assistance in preparing this article.