Pension update - May 11, 2023

Q1 2023 Solvency Report

Most Pension plans in Ontario continue to get stronger. FSRA’s Q1 2023 Solvency Report projects 86% of plans to be fully funded on a solvency basis. In fact, the median solvency ratio for the quarter reached 115% – a new all-time high. This was driven primarily by investment gains, which averaged out to 4.3% for the quarter.

To learn more, access the report.

New: Guide on Bankruptcy

What does a plan member need to know when their employer goes bankrupt? FSRA’s new easy-to-understand guide has answers and information that can be shared with plan members as a great resource. The guide includes:

• tips on how to stay engaged with the pension plan if the employer is insolvent
• bankruptcy process based on pension plan type
• information on Pension Benefits Guarantee Fund (PBGF) and its role, and more

To learn more, access the Guide on Bankruptcy.

Update: Pension Plan examinations

FSRA has started piloting its new approach to pension plan examinations. The new framework, which is expected to be fully implemented in 2024, builds on FSRA's risk-based, outcomes-focused supervisory approach and its engagement with plan administrators to ensure the good administration of plans. It will further protect and safeguard the pension benefits and rights of plan beneficiaries.

The goal of the pilot process is to ensure that FSRA’s new approach to pension plan examinations appropriately identifies plans where there may be heightened concerns and that regulatory resources and efforts are deployed in a risk-based manner. This is also an opportunity to calibrate FSRA’s findings report at the conclusion of a plan examination.

To date, FSRA has examined two plans. FSRA expects to complete 15-20 plan examinations by the end of 2023 and will continue to provide updates to the sector throughout the year.

Below are the steps involved in a pension plan examination by FSRA:

• plan selection
• kick-off engagement with plan administrator
• gather preliminary information
• deeper dive engagements and examination
• report results
• monitor and follow up

Update: Outreach to Defined Contribution (DC) Pension plans

To ensure that DC plans are supported and understand their obligations under the Pension Benefits Act (PBA), FSRA provided over 3,100 DC plan sponsors with the following information:

• Defined Contribution (DC) Pension Plans – What Employers Need to Know
• Visual summary

Update: More than 175,000 missing members in Ontario

As of September 1, 2021, FSRA required plans to provide a best estimate of their missing members data when filing their Annual Information Return (AIR). FSRA found that there are currently more than 175,000 missing pension plan members in Ontario, who are entitled to over $3 billion in assets.

Learn more in our interim update on missing member data collection.

Consultation on target benefits

The Ministry of Finance is consulting on proposed regulations necessary for implementing a permanent target benefit framework in Ontario.

The proposed framework is designed to strengthen governance, improve transparency, and support long-term plan sustainability for employers and members by implementing written policies, disclosures, and funding requirements.

The Ministry is interested in meeting with stakeholders to receive feedback on the proposals. Meetings can be arranged by emailing [email protected].

For more information or to submit comments, please visit Ontario Regulatory Registry.

Reminder: Call for new members for Pensions standing Technical Advisory Committees

We are seeking new members for our standing Technical Advisory Committees. These committees advise FSRA on proposed pension regulatory guidance and identify issues arising out of existing pension legislation. Committee members will be selected based on their pension knowledge, areas of expertise and level of experience, ensuring that each committee has diverse perspectives and representation from unions, plan members and retirees.

If you are interested in joining a committee, please send your biography or CV to Jennifer Mullen.

Please indicate which committee you would like to join. Terms for new members may begin in the fall or winter – selected individuals will be notified of their appointment term.