Pension plan statements to change on July 1

By Andrew Rickard | May 25 2016 11:32AM

Clients who have pension plans will start receiving more detailed statements this summer.

In the most recent issue of its InfoPensions newsletter the Office of the Superintendent of Financial Institutions (OSFI) notes that a number of recent amendments to the Pension Benefits Standards Regulations (PBSR) will come into effect on July 1. These include provisions regarding electronic communications, spousal consent to portability to certain registered retirement vehicles where a member is eligible for early retirement, investment rules, and disclosure requirements.

Enhanced disclosure requirements

The enhanced disclosure requirements mean that clients who have defined benefit or defined contribution pension plans will see a change in the content of their annual statements. In particular, OSFI says that:

  • Annual statements will now have to be provided to former members and their spouses or common-law partners.
  • For defined benefit plans, annual member statements will now have to include more information on the solvency position of the plan and the amount of employer payments made to the plan for the year.
  • For defined benefit and defined contribution plans where the administrator makes all investment decisions, annual member statements will now have to include a list of the pension funds' 10 largest asset holdings and the target asset allocation for the fund.
  • For defined contribution plans which permit investment choices, specified information regarding investment options available will now have to be provided annually to those permitted to make those investment choices.
  • Plan booklets and annual statements sent to members of negotiated contribution plans will now have to explain that contributions to these plans are limited and that this may lead to reductions in accrued benefits if the negotiated contributions are insufficient to meet the prescribed solvency standards.
  • On plan termination, members, former members, and their spouses or common-law partners will now be entitled to receive a notice of the plan termination within 30 days of the plan termination date. Administrators will now have 120 days from the plan termination date to provide the detailed benefit statements to these recipients.

If annual statements were scheduled to be mailed to members before July 1, 2016, they will not be required to reflect these new disclosure requirements.

There is a detailed chart on the OSFI web site that outlines the various amendments to the PBSR and the dates they will come into force.

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