On January 21, 2011, the Office of the Superintendent of Financial Institutions (OSFI) issued a Guide to Intervention for Federally Regulated Private Pension Plans. This Intervention Guide sets out the situations in which OSFI will take action in its capacity as the Canadian federal pension regulator, and enumerates the various powers which it may deploy depending on the particular pension plan's "Composite Risk Ratio".
The Intervention Guide uses a colour schematic to set out the spectrum of risk ratios. The palette ranges from green (Low Risk) to red (High Risk), but OSFI then goes the U.S. Department of Homeland Security one better by extending its spectrum beyond red to black (Permanent Insolvency).
This "threat level" colour scheme,not to mention the use of a Winfreyesque expression like "intervention" with its connotation of concerned individuals surrounding a person suffering from some sort of addiction, may provoke a few snickers. In practice, however,the Intervention Guide should actually be helpful to sponsors and administrators of federally-registered pension plans, for it serves as a fairly reader-friendly summary of OSFI's current approach to pension regulation (which approach is set forth in greater detail in OSFI's April 2009 Risk Assessment Framework for Federally Regulated Pension Plans). Even better, it contains a useful checklist of all of OSFI's statutory and regulatory powers in the pension field, updated to reflect the most recent changes to the federal pension legislation and organized to indicate the circumstances in which those various powers may be deployed.