Recent regulatory changes, case law precedents and best practices are reshaping the pensions and benefits sector. These changes emphasize the need for robust compliance, governance and strategic planning to effectively navigate emerging risks and obligations.

Below are five key developments that plan administrators and stakeholders should keep in mind.

1. Regulatory Updates. The federal government has introduced proposed amendments that would require OSFI to publish investment information with respect to certain federally regulated pension plans. Provincially, Ontario filed various regulations to implement a permanent target benefit framework and Quebec amended regulations to permit members or spouses who are 55 years of age or older to withdraw all or part of the sums held in a life income fund.
2. Capital Accumulation Plan. Revised CAP guidelines clarify the sponsor role and significantly expand the guidelines’ scope to a broader range of retirement savings and income plans, including TFSAs and FHSAs. The guidelines highlight governance and member education as key focuses, along with recommendations for improved communication to members around fees and investment decisions.
3. Pension Surplus Management. Improved funding ratios have spotlighted surplus management strategies. Possible uses for surplus funds include plan expenses or contribution holidays — if the plan documents permit. For surplus withdrawals, employer entitlement or surplus sharing are possible pathways, with sharing agreements being a particularly practical option. Pension plans should be mindful of member consent thresholds for such withdrawals. Legislative requirements across multi-jurisdictional pension plans also warrant careful navigation for surplus withdrawals.
4. Pension Derisking. With rising interest rates making annuities more cost-effective, pension plans are increasingly turning to annuity buy-in and buy-out arrangements to fulfil pension fund obligations. Administrators should ensure plan documents permit such transactions and address any jurisdictional variances in discharge provisions for buy-outs specifically. Careful attention to counterparty risk and insurance coverage limits, including Assuris protections, are also important considerations when buying annuities.
5. Quebec Privacy Laws. Quebec’s strengthened privacy laws have introduced significant compliance obligations for enterprises collecting personal information from individuals. While there is some uncertainty as to whether pension plans would be subject to those compliance obligations, we recommend that pension plan administrators implement certain best practices compliant with the requirements of Quebec privacy legislation, including appointing a privacy officer, obtaining written consent for the collection and disclosure of sensitive personal information, and implementing safeguard measures with service providers. The strict incident reporting rules and substantial penalties for breaches provided for by Quebec’s privacy legislation underscore the importance of robust personal information governance.

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