Canada: How To Review A SIPP

Last Updated: September 5 2014
Article by Lorraine Allard

Most Read Contributor in Canada, September 2018

A Statement of Investment Policies and Procedures (SIPP) is a legal document that is required by law to be developed and adopted for each registered pension plan. This is so regardless of the nature and degree of complexity of the plan. The SIPP must contain the prescribed information, must be reviewed annually and must be amended when necessary; and for plans registered in Ontario, it will soon need to be filed with the Financial Services Commission of Ontario.1

Like any other legal document, the SIPP should be reviewed by a lawyer knowledgeable in the area.2 Such a review is recommended to ensure that the SIPP does, in fact, comply with the requirements of the applicable pension standards legislation and section 8514 of the Income Tax Regulations, and that it contains what it should, and that it is not inconsistent with anything else. Many Canadian jurisdictions, like Ontario, have adopted, by reference, the federal investment regulations consisting of section 6 and schedule III of the Pension Benefits Standards Regulations Act (Federal Investment Rules).3

The Matrix

The Federal Investment Rules provide that a SIPP must deal with the categories of investments and loans, including derivatives, options and futures, asset mix and rate of return expectations, investment liquidity, the lending of cash or securities, voting rights acquired through investments, the valuation of illiquid investments and related party transactions.

In order to properly review a SIPP, the reviewer should take into account any document describing investment parameters which is ancillary to the plan as well as any employer-specific document which may deal with investments generally and to which pension investments may be subject. This will help to avoid internal inconsistencies. The plan-specific documents include:

  • the prior version of the SIPP, 
  • the plan text, 
  • the current master trust agreement and participating trust agreement,
  • employee booklets, and
  • current collective bargaining agreements and letters of understanding.

The broader category of documents to be reviewed includes investment or other policies and/or by-laws dealing with asset management which are internal to the sponsoring employer and/or administrator.4 In some cases, it will be incumbent on the sponsoring employer and/or administrator to provide these to the reviewer without being prompted, since the reviewer will not know of their existence and therefore will not know to request them.

Master Trusts

Where the sponsoring employer has adopted a master trust structure, the reviewer will want to make sure that the wording of the SIPP allows each participating plan to comply with the requirement that it have its own SIPP.5 A Statement of Investment Policies and Procedures for the master trust alone will not comply with legislation.

Defined Contribution Plans

As discussed above and subject to legislation, even simple defined contribution (DC) plans need a SIPP.

Where the DC plan does not leave the investment of contributions made by and on behalf of members to the members, the SIPP will look very much like the SIPP for a defined benefit (DB) plan. However, where the DC plan does offer, as many do, a stable of investment options to the members, the SIPP will be primarily focused on the types of investment options to be provided, what is expected of the investment manager for each investment option and how the options are to be selected, and how their performance is to be gauged. A description of how the quantitative Federal Investment Rules6 are to be complied with in the context of DC investment options is an important consideration. The document describing an investment option's own investment parameters can be appended to the SIPP, although this is not necessary.7

A plan with both a DB and a DC component should have only one SIPP in which both components are dealt with. Although the SIPP may, in fact, deal with the DC component in an appendix to the SIPP, the elements that are common to both components should be dealt with only once so that there is no redundancy or inconsistency between the two components.

Less Is More

One thing that a pension lawyer will also advise on is the amount of information that should be added to a SIPP in addition to what is required by law. As discussed above, the SIPP is adopted primarily because the law requires it. It is not the length of a SIPP that is important.8 It is whether it covers what it needs to cover clearly and accurately.

A lawyer will typically advise against covering anything other than is required by law unless there is a compelling reason to do so. The reason is simple: the more that is said, the greater the risk of inconsistencies and non-compliance. Anything added to the SIPP that may be covered in another document increases the chance that this information will not be consistent among the various documents. Any unnecessary repetition of restrictions that are already found in the legislation and any extraneous statement in a SIPP which the employer and/or administrator fails to comply with will surely be brought into evidence should litigation arise. The employer and/or administrator should avoid creating a road map for potential litigants to argue that it has breached one of its (self-imposed) obligations.

When drafting a SIPP, it should be kept in mind that anything concerning pension investments emanating from a government, other than legislation itself, however helpful, is not law. Unlike the securities regulators, the pension regulators do not have the authority to make binding rules. For example, it should not be assumed that the PPPD Investment Policy Guideline, issued by the Office of the Superintendent of Financial Institutions in April 2000, should be followed in its entirety. A knowledgeable reviewer will know what, among such publications, has become standard and should appear in a SIPP, and what should be left unsaid.

The Limits of Review

It should be noted that although a legal review will be focused on consistency with the quantitative limits on investments and other investment rules, on identifying and dealing with inconsistencies, and on improving the drafting of the SIPP overall, it will not address the reasonableness of the investments and investment parameters set out in the SIPP (i.e., the qualitative aspect of investments).

Given how long many SIPPs have been around and, in Ontario, the impending filing requirements, it may be time to revisit existing SIPPs with a critical eye.


1 In its 2011 budget, the Ontario government announced its intention to "require plans to file Statements of Investment Policies and Procedures (SIPPs) with the regulator and disclose whether or not their SIPPs address environmental, social or governance factors."

2 Filing requirements vary among the various Canadian jurisdictions. Most jurisdictions do not require that a SIPP be filed with the regulator, but New Brunswick does, and Nova Scotia and Newfoundland and Labrador require that it be delivered to the actuary.

3 See section 78 of the General Regulation adopted under the Pension Benefits Act of Ontario.

4 For example, large public sector employers are often subject to investment policies with which a SIPP would be required to be consistent.

5 See the June 5, 2014, article "Do You Know Trusts?". It should be noted that, as a master trust is a private pooling vehicle structured to aggregate pension plan assets for investment purposes, the law does not require that it have a SIPP, much less that such a SIPP be filed. However, from a practical perspective, a SIPP should be adopted for a master trust.

6 For example, the 10% rule.

7 Certainly, such a document is not a proper substitution for the SIPP itself, since the plan sponsor will select the option based on the parameters it has established in the SIPP.

8 Some of the biggest plans have SIPPs that are no more than a dozen pages long.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Topics
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions