Introduction

What is a missing member? 

A pension plan member is considered “missing” if the plan administrator is unable to locate or communicate with the member and reasonably believes that the address on record for that member is no longer valid.

This can happen when, for example, plan members earn a small benefit at the start of their career and then after a year or two, change employers and forget about their entitlement. Then they might move and fail to update their new address with the pension plan they forgot they had. Some members might also assume that their employer’s HR department communicates with the administrator of their pension plan, which often isn’t the case. They might move and assume HR will share their updated information. Similarly, although various government offices may have your current address, that information has no way of getting to the pension plan administrator as these plans are not operated by the government.

Background

FSRA and the sector recognized the issue missing members was a topic that needed further exploration to understand its scope and magnitude. In July 2019, FSRA launched a Technical Advisory Committee for Missing Plan Members in the Pension Sector. The committee looked at ways to better:

  • ensure plan members remain connected with their pensions
  • promote good plan administration
  • reduce administrative burden for plan sponsors
  • ensure efficient management of pension plans, including facilitating transactions that naturally occur over the evolution of a plan such as asset transfers and plan wind ups

Following the Committee’s advice, FSRA developed key data intakes to assist the development of future policy work around the issue of missing members. In August 2020, FSRA began collecting information about missing members on a voluntary basis.

FSRA also announced that the data collection would become mandatory in 2021. 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).

This data helps FSRA and Government of Ontario to better understand the number of missing members and their pension entitlements. It also helps FSRA evaluate the effectiveness of the Guidance documents, Principles and Practices Regarding Missing Members and Waiver of Biennial Statements for Missing Former and Retired Members.

Findings 

There are currently more than 175,000 missing pension plan members in Ontario, who can’t be located by the pension plans they belong to. Collectively, these individuals, or their estates, are entitled to over $3 billion in assets. 

Of the 175,000 missing members reported by plans to FSRA, we found that:

  • 54% are from Multi-Employer Pension Plans (MEPPs); 
  • 25% from Jointly Sponsored Pension Plans (JSPPs); and 
  • 21% from Single Employer Pension Plans (SEPPs). 

The $3 billion in assets for missing members is attributed as follows: 

  • 44% to SEPPs; 
  • 32% to JSPPs; and 
  • 24% to MEPPs.

This tells us, 

  • While nearly 80% of missing members (roughly 140,000 missing members) belong to MEPPs and JSPPs, almost 50% of the average assets of missing members are attributed to SEPPs. 
  • While SEPPs have just under 40,000 missing members, these missing members are entitled to nearly $1.4 billion in assets.  

Looking at missing members over the age of 100, FSRA found that:

  • From 2019 to 2021, the number of missing members over 100 years old reported by plans to FSRA also continued to increase.
  • A 2021 Statistics Canada Census Profile for Ontario reports there were 3,705 Ontarians over 100 years old. By comparison, in 2021, plans reported nearly 5,000 missing members over 100 years old. 
  • This means that most of these members are almost certainly deceased but under the current legislative framework plans cannot extinguish the liability.

The average pension value reported by plans to FSRA in 2021 was slightly over $17,000. Over 20 years, this would yield a monthly pension of about $71.

Looking at missing members by plan size, FSRA found that: 

  • By 2021, when data collection became mandatory, 1,341 plans reported missing member data. 
  • FSRA’s preliminary conclusion is that plans that did not report to FSRA believe they have no missing members. 
  • This may indicate that that plans with smaller memberships lose fewer members as it’s easier to keep track of fewer members. For context, FSRA regulates over 3,000 plans with fewer than 100 members. 

From 2019 to 2020 when reporting was voluntary, plans reported to FSRA the total number of “new”[1] missing members increased more than tenfold from 4,584 to 51,639. By 2021 when reporting became mandatory, the number reported decreased by 7.5%, suggesting this is a historical issue and is not getting worse. It would also suggest that plans have been successful at reconnecting with some of their missing members. This decrease in new missing members reported to FSRA could also be attributed to an increasing number of digital savvy retirees using online pension portals to check their plan information and to stay connected with their plan.

We look forward to including additional information on missing members in future years’ performance reports.

[1] New missing members are missing members a plan has identified within their last reporting period.