Pension legislation imposes a statutory duty of care on a
pension plan administrator in the administration and investment of
the pension fund. In discharging such duty of care, an
administrator must review the pension fund investments and the
plan's statement of investment policies and procedures on a
The current market instability and related employee enquiries
have caused administrators to ask whether they need to take any
particular action in the circumstances to discharge their duty of
care. Pension legislation does not impose specific obligations on
pension plan administrators during market instability. However,
there are a number of matters which an administrator should
consider. These matters are relevant to pension fund administration
at all times, not only during times of market instability. Market
instability only highlights the need to take them into
The following is an illustrative and non-exhaustive list of
matters which an administrator should consider:
Review the plan's statement of investment policies and
procedures (SIPP) and determine whether any amendment to the SIPP
is required, e.g., whether the investment and risk philosophies and
portfolio diversification are still appropriate; whether changes
are required to reflect the fund investment portfolio. Although the
current market events should be taken into account as part of the
review process, they should not be the dictating factors.
Review pension fund investments to determine:
whether the pension fund investments are in compliance with the
SIPP, e.g., whether any investment falls outside the parameters or
below the applicable ratings set out in the SIPP; whether any asset
mix rebalancing is required;
for a defined benefit pension plan, the appropriateness of the
pension fund investment portfolio, e.g., whether the current asset
mix, investment and risk philosophies are still appropriate;
for a defined contribution pension plan, the appropriateness of
the investment options, e.g., whether it is appropriate to offer
more guaranteed investment products.
Consider the desirability of having meetings with investment
managers to discuss their approaches and investment strategies to
deal with the economic conditions and to discuss the investment
exposure of the pension fund.
Consider the desirability of conducting an investment
governance audit as this may be useful for confirming compliance or
discovering non-compliance which requires remedial action.
Investigate the financial stability of service providers and
other counterparties, e.g., pension fund trustee and custodian,
record keeper, counterparties to derivative transactions and
securities lending arrangements.
Consider the desirability of general employee communications
particularly if there are employee enquiries. If a decision is made
to issue such communication, the communication needs to be
carefully drafted for accuracy and to avoid it being taken as
Unfortunately, reasonable accommodation for employees in the workplace continues to be the source of significant litigation and even today we continue to see outrageous examples of employers behaving badly.
We are now beginning to see reported cases involving charges and subsequent fines laid against employers for failing to provide information, instruction and supervision to protect a worker from workplace violence.
On October 13, 2016, the Supreme Court of Canada denied leave to appeal an Ontario Court of Appeal decision which ordered an employer to pay a former employee 37 months of salary and benefits following termination.
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).