The Office of the Superintendent of Financial Institutions
(OSFI) issued a Guide to Intervention for Federally
Regulated Private Pension Plans on January 21, 2011.
The objective of the Intervention Guide is to promote awareness
and enhance the transparency of the intervention process used by
OSFI for federally regulated private pension plans. It outlines
when and how OSFI will intervene, depending on the particular
pension plan's Composite Risk Rating (CRR), which reflects
OSFI's overall risk assessment of the plan.
"Stage Ratings" identify the applicable interventions
that may be initiated by OSFI and there are three stages that are
of main concern: Stage 1 (Early Warning), Stage 2 (Risk to
Solvency), and Stage 3 (Future Solvency in Serious Doubt). Key
examples of the triggers for each stage and the regulatory actions
that OSFI may pursue, are outlined below.
STAGE 1 – EARLY WARNING
At this stage, OSFI may have identified deficiencies in the plan
that are within the administrator's abilities to address.
Regulatory actions may include:
Recommend the administrator provide appropriate disclosure to
Recommend scenario/stress testing be conducted;
Confirm with Asset holder/custodian that required contributions
have been remitted to pension fund;
Obtain an action plan from the administrator to address
STAGE 2 – RISK TO SOLVENCY
OSFI has identified problems that pose a threat to the security
of members' benefits, which could deteriorate into a serious
situation if not addressed promptly, and at this stage, OSFI would
its supervisory interventions. Regulatory actions may
Require early filing of actuarial report;
Require the plan administrator to hold a meeting with plan
members or other relevant parties;
Require freezing/restricting portability for transfer of
benefits from the plan or annuity purchases that would impair the
solvency of the plan.
STAGE 3 – FUTURE SOLVENCY IN SERIOUS DOUBT
At this stage, OSFI has identified material and immediate
threats to members' benefits and would escalate its
interventions further. Regulatory actions may include:
Issue a Direction of Compliance;
Revoke the plan registration where a Direction has not been
Terminate the plan;
Bring an action against the administrator, employer or any
The release of OSFI's Intervention Guide is consistent with
other recent developments in federal pension law, including Bill
C-9 (Jobs and Economic Growth Act ) and Bill C-47 (Sustaining
Canada's Economic Recovery Act ) which resulted in various
amendments to requirements in the Pension Benefits Standards Act,
1985, as well as recent changes to the Pension Benefits Standards
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