As discussed in a previous blog post, the Ontario government is
continuing its ongoing pension reform initiative by amending the
Pension Benefits Act (Ontario) (the PBA) and its
accompanying Regulations. On November 27, 2014, new amendments to the Regulations under the PBA
came into force, revising the rules related to Statements of
Investment Policies and Procedures (SIPPs), and adding a new
requirement to send pension statements to the plan's former
members and retired members. We summarize these changes below, and
explain what they mean for plan administrators.
Effective January 1, 2016, plan administrators must file SIPPs
with the Financial Services Commission of Ontario (FSCO). Prior to
these regulatory changes, while every pension plan registered in
Ontario was required to have a SIPP, the SIPP did not have to be
filed with the regulator. In addition, SIPPs must now include
information about whether environmental, social and governance
(ESG) factors are incorporated into the SIPP and, if so, how the
ESG factors are addressed in the plan's investment
Note that the regulatory amendments do not require plan
administrators to include ESG factors in their investment
decision-making process; the requirement is limited to disclosing
whether or not ESG factors are considered when making investment
decisions. If ESG factors are incorporated in the plan's
investment strategy, then plan administrators must disclose how the
ESG factors are incorporated.
To date, FSCO has not provided any guidance on what may be
considered ESG factors, nor is the term defined in the PBA or the
For existing pension plans, plan administrators must file their
SIPP with FSCO within 60 days after January 1, 2016. For plans
registered on or after January 1, 2016, the SIPP must be filed
within 60 days after the plan is registered. Also, any amendment to
a SIPP must be filed within 60 days after the amendment is
Pension Statements for Former Members and Retired Members
Perhaps a more significant change for many pension plan
administrators, the revisions to the Regulations now require
administrators to provide former members and retired members with
written pension statements every two years. Before these changes,
while annual pension statements had to be provided to active
members, there was no requirement in the PBA to provide pension
statements to deferred vested members or to retired members. The
regulatory amendments set out the prescribed information that must
be included in these new statements, which is similar to the
information provided in annual statements to active members.
For existing pension plans, the first statements for former and
retired members must be transmitted no later than July 1, 2017.
After that, plan administrators will have to provide statements to
former members and retired members every two years, within six
months after the plan's fiscal year end.
For plans registered on or after January 1, 2015, the first
statements must be transmitted within 18 months after the
plan's year end. After that, plan administrators will have to
provide statements to former members and retired members every two
years, within six months after the plan's fiscal year end.
In addition, the revised Regulations require that all member
statements (including the annual statements to active plan members)
must also include the following information:
a statement that the plan administrator must establish a SIPP
in respect of the plan's portfolio of investments and
information about whether ESG factors are incorporated into the
plan's SIPP and, if so, how the ESG factors are incorporated;
information about how interested members may inspect or obtain
a copy of the plan's SIPP.
Since SIPPs must now be filed with FSCO, it is advisable for
plan administrators to review the SIPP governing their plan, to
ensure that it complies with the new legislative requirements as
well as the requirements that have always applied to SIPPs. In
addition, in order to prepare for the new requirements for pension
statements, plan administrators should start collecting the data
necessary to prepare the former member and retired member
statements, and if possible verify that the addresses for these
members are still current. It would also be advisable to start
preparing a template for the statements to the former and retired
members, and to revise the existing annual member statement
template to incorporate the new required information about
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.
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