FSCO reminds administrators about their roles and responsibilities
On January 25, 2016, the Financial Services Commission of Ontario (“FSCO”) issued a new policy that describes the roles and responsibilities of administrators of registered pension plans (policy A300-101). It replaces aging policies which were published in 1990 and 1992 (policies A300-100 and A300-150). Things have not changed drastically in the last two and a half decades. In fact, much of the new policy echoes the old. Some of the new elements in the policy refer to recent legislative and regulatory changes. In summary:
- FSCO emphasizes the key responsibilities of pension plan administrators to comply with the federal investment regulations and the new requirements regarding environmental, social and governance factors with respect to the Statement of Investment Policies and Procedures.
- Regulatory filings must be made electronically through the Pension Services Portal, including requests for an extension of a filing deadline.
- As of January 1, 2015, administrators must provide statements of pension benefits to former members and retired members every two years.
- The administrator is responsible for addressing inquiries and complaints from plan beneficiaries, or delegating the task to an agent if the administrator does not have the necessary knowledge.
- FSCO emphasizes that the administrator must monitor and review delegated activities and that certain duties cannot be delegated. More information can be found in CAPSA Guideline No. 6.
- The conflicts of interest section of the new policy has been expanded to reference CAPSA Guideline No. 4, while another section of the policy expounds on the “prudent person rule” as the fiduciary standard that applies to administrators.
- Finally, the new policy sets out the need for prudent record-keeping practices, making reference to the relevant FSCO policy, and the administrator’s duty to make certain records available for inspection.
Ontario plan administrators will pay more to the regulator
On February 10, 2016, FSCO published its 2015-2016 preliminary pension assessment for the entire pension sector, and issued pension assessment invoices for all Ontario-registered pension plans. Primarily, these invoices set out the amount that must be paid for the year by each pension plan administrator to cover all estimated expenses and expenditures incurred by FSCO for the pension sector, along with a per member cost for their own plan.
This assessment is, however, simply an estimate of FSCO’s expenses and expenditures for this fiscal year. The actual cost will only be known by March of 2017. At that point, next year’s preliminary assessment will have been issued absorbing this year’s over or undervaluation of the actual cost of FSCO’s expenses.
The 2014-2015 total pension assessment for Ontario was approximately $15 million. The current (2015-2016) preliminary pension assessment is slightly higher.
New FSCO form for joint & survivor pension waiver
FSCO has issued a new Form 8 to be used by a former spouse to waive his/her right to a survivor benefit on the death of a retired member in the case of a marriage breakdown. It is essential that plan administrators use this new form.