Key Takeaways From The 2025 Annual Pension & Benefits Seminar

The 15th Annual Pension & Benefits Seminar, held on October 22, 2025, brought together leading pension professionals to discuss recent developments, emerging challenges, and best practices in the pensions and benefits sector. The sessions focused on legislative updates, estate and beneficiary administration, family law intersections, and strategies for managing surpluses in defined benefit plans. The following summary outlines the principal insights and recommendations from the seminar.

Legal and Regulatory Updates

2025 has seen relatively modest legislative change compared to the flurry of new rules and regulatory guidance in 2024, but there were still several notable developments:

• Legislative Changes: Ontario introduced a new legislative and regulatory framework for target benefit multi-employer pension plans (MEPPs), effective January 1, 2025. To support implementation, FSRA released proposed supervisory guidance explaining how it will review applications to convert defined benefits to target benefits, assess funding policies, and supervise target benefit plans through regular reviews and ongoing engagement with administrators. Stakeholders were invited to provide feedback, with the consultation period closing in October 2025.
  
  In Nova Scotia, new regulations now set out the process for private sector defined benefit pension plans to merge into the Public Service Superannuation Plan. The rules require Superintendent consent, detailed member notification and voting procedures, and strict documentation for transfer agreements. Unions may vote on behalf of active members, and all relevant parties must be notified throughout the process.
  
  British Columbia updated its governance guidelines for pension plan administrators, highlighting information security as a material risk and requiring plans to implement comprehensive risk management and incident reporting measures. The province also unveiled a modernized supervisory framework that emphasizes proactive, ongoing monitoring of current and emerging risks to help prevent significant issues before they arise.
  
• Case Law Developments: Recent arbitration decisions emphasize that employers must fulfill contractual commitments when agreed upon conditions are met. Additionally, in the event of a challenge, arbitrators and adjudicators may consider the history of plan administration and the parties' past conduct when determining whether benefit limitations or terms can be contested.
  
• Federal Initiatives: The CRA has announced system improvements for plan administrators such as the acceptance of digital signatures, a modernized reporting and document filing portal, and a pilot project to identify missing pension plan members that may be rolled out to all plan administrators in future.

Estate & Beneficiary Administration

This session focused on practical considerations when plan members die or become incapacitated, and how plan administrators can navigate the differing legal rules in various provinces. Key highlights include:

• Prioritizing the Right Survivor: Pension legislation gives the surviving spouse priority rights to most death benefits, but the definition of "spouse" and conditions can vary by province. Administrators must verify marital status and obtain proper documentation to ensure benefits are paid to the correct individual.
  
• Handling Minor Beneficiaries: When pension benefits are payable to minors, funds must be held in trust or managed by a legal guardian, until the child attains legal age. In some cases, the funds may need to be paid into Court. Provincial laws may vary. Administrators should be prepared with appropriate trust wording and processes.
  
• Incapacity and Powers of Attorney: Powers of Attorney (POA) for property can manage pension matters for incapable members, but cannot alter beneficiary designations. Administrators should verify the validity of POAs and resolve any conflicting instructions before proceeding.
  
• Estate Representatives: Estate representatives must provide proof of authority for benefit payouts. Administrators should request necessary documentation, which may require that Probate be obtained appointing the Estate Trustee/Executor to ensure that you are dealing with the correct legal representative for the Estate. Be prepared to provide date-of-death benefit valuations for estate accounting and probate purposes.

Family Law Considerations

Family law issues frequently intersect with pension administration. The seminar's family law panel discussed how relationship breakdowns (separation or divorce) can affect pension benefits, and what plan administrators should know:

• Defining the Spouse in Complex Situations: Relationship breakdowns can complicate survivor benefit eligibility. Provincial rules determine whether a separated spouse or common-law partner qualifies, and administrators must diligently confirm spousal status, often requiring separation agreements or court orders.
  
• Pension Assets on Divorce: Pension benefits earned during marriage are considered matrimonial property and must be divided according to provincial law. Administrators are responsible for accurate valuations and strict compliance with legal requirements.
  
• Spousal Waivers of Pension Rights: Spouses may officially waive entitlement to certain pension benefits, provided the waiver is properly executed and documented. Administrators should ensure waivers are received before relevant events and are on the correct forms.
  
• Managing Conflicting Claims or Orders: Clear communication and cautious administration are essential when multiple parties are involved. Administrators should document all steps, communicate with claimants, and seek legal advice or court direction when necessary.

Surplus Management in Defined Benefit Plans

Our final session addressed the "good problem" of pension surplus – identifying what options plan sponsors have for managing an overfunded plan, and the legal or practical constraints relating to those options. Here are the key highlights from the discussion:

• Using Surplus Strategically: Surplus should be managed in alignment with plan documents, union agreements, organizational objectives, statutory requirements and common law principles. Sponsors must also consider long-term HR and financial strategy when deciding how to utilize surplus.
  
• Option 1 – "Do Nothing": There may be other organizational priorities currently, or the surplus may be modest. In these circumstances, retaining surplus in the plan without doing more leaves options open for the future and to some extent may be seen to preserve a simple funding cushion without otherwise changing investment or other strategies.
  
• Option 2 – Improve Benefits for Members: Surplus can be used to enhance pension benefits, such as indexation or one-time payments, though careful modeling should be used to assess the long-term funding impact of benefit changes.
  
• Option 3 – Take a Contribution Holiday: Employers may temporarily suspend contributions (in whole or in part) when the plan is overfunded, subject to legal and plan-specific conditions. Transparent communication with members is essential. An employee contribution holiday may also be considered.
  
• Option 4 – De-risk the Investment Portfolio: Surplus status enables sponsors to reduce risk exposure through strategies such as liability-driven investing and annuity purchases.
  
• Option 5 – Plan Design Changes: Surplus conditions may prompt plan design changes, such as freezing DB plans or transitioning to DC arrangements; these changes may require stakeholder management, and employment and labour law implications should be carefully considered.
  
• Option 6 – Surplus Withdrawal: Employers may withdraw surplus assets for corporate use, but the process is complex and requires regulatory approval. Surplus withdrawals are rare in recent years and require skilled legal assistance to navigate legal and practical considerations.

Final Thoughts

Effective pension plan management requires adaptability to legislative changes, member life events, and financial conditions. Sponsors and administrators should prioritize robust governance frameworks and risk-management processes, to promote plan sustainability and ensure long-term plan resiliency. By proactively identifying and implementing strategies to address matters of legal compliance, member engagement, and financial strategy, plan sponsors and administrators can turn challenges into opportunities and maintain secure pension promises for the future.

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