Summary of stakeholder comments - Pension Plan Administrator Roles and Responsibilities Guidance

• ACPM
• OBA

Stakeholders expressed concern that the change in Guidance type from Interpretation/Information to Interpretation could be read to create different compliance obligations for plan administrators. As the Guidance also incorporates FSRA’s views on good practices, it was suggested that FSRA classify the Guidance as Information instead of Interpretation.

It was also mentioned that the content does not have a clear delineation as to which is interpretation, and which is information. It was recommended that FSRA should minimize prescribing specific policies/frameworks to allow plan administrators to implement them in a manner that is best suited to their pension plan.

FSRA recognizes that the Guidance contains both obligations which represent FSRA’s views on legislative requirements under the PBA, as well as good practices that plan administrators should consider in exercising their fiduciary discretion.

On balance, FSRA is of the view that the Guidance is best characterized under FSRA’s Guidance Framework as Interpretation Guidance for the reason that its primary purpose is to provide Interpretations of requirements under the PBA relating to the roles and responsibilities of plan administrators.  Although Interpretation Guidance may set out compliance obligations that reflect FSRA’s views of statutory requirements, it may also set out good practices that do not necessarily represent binding requirements, but rather allow for judgement and discretion as regulated entities consider how to best meet intended outcomes.

FSRA does, however, appreciate the desire for greater clarity and assistance in identifying which portions of the Guidance establish a compliance obligation versus those which set out good practices or important considerations for plan administrators without creating a specific compliance obligation. FSRA has thus added a clarifying footnote and revised certain language to help in reading the Guidance and identifying specific compliance obligations.

• Mercer

Stakeholder suggested a more prominent acknowledgement that specific aspects of the administrator’s roles and responsibilities can vary depending on the nature of the pension plan than currently embedded in Footnote 1.

FSRA has moved content from a footnote into the body of the Guidance to make a more prominent acknowledgement that specific aspects of the administrator’s roles and responsibilities can vary depending on the nature of the pension plan.

• ACPM
• Mercer
• OBA

Stakeholders expressed concern with existing language that applied only to defined benefit single employer pension plans (DB SEPPs).

As noted in the revised section 1 and footnote 1, the Guidance is not intended to state all administrator roles and responsibilities for all plan types, but to highlight certain key areas in FSRA’s regulation of pension plans. FSRA acknowledges administrator responsibilities may vary in their specifics based on plan type.

FSRA has made a clarifying edit to indicate that the language with respect to funding may not apply in all contexts.

• OBA

Stakeholder expressed concern with existing language as it relates to the delegation of decision-making and suggested more alignment with language in the PBA.

FSRA has revised language in paragraph 3.2 and 3.3 to clarify its interpretation of the relevant PBA provision relating to delegation of decision-making and the role of the administrator to satisfy the standard of care.

• OBA

Stakeholder expressed concern with existing language as it relates to managing conflicts of interest and suggested revisions to consider situations where conflict itself is unavoidable, but the duty of the administrator is to appropriately address and manage the conflict, which matches the reference to PBA section 22(4) in footnote 11.

FSRA has revised language in paragraph 5.2 to provide greater clarity on FSRA’s interpretation of PBA section 22(4) as it relates to conflicts of interests.

With reference to the specific comment that the duty described under section 22(4) of the PBA is satisfied in certain cases by “appropriately address[ing] and manage[ing] the conflict”, FSRA’s view is that, in such cases, the administrator still must ensure that the plain language of s. 22(4) is satisfied. This means that steps were taken such that the administrator has not knowingly permit the administrator’s interest to conflict with the administrator’s duties and powers in respect of the pension fund. FSRA has therefore retained the more general reference to the language in s. 22(4).

• ACPM
• Mercer

Stakeholders expressed concern with revised language relating to the standard of care and the obligations required of administrators based on the knowledge and skills that would be expected from their profession, business, or calling.

FSRA has revised language in paragraph 5.3 to state that section 22(2) (which along with 22(1)) of the PBA “establishes” the standard of care).

• ACPM

Stakeholder expressed concern with revised language relating to professional advisors and conflicts of interest.

FSRA has revised the language in paragraph 5.6. However, FSRA still believes it is important for the Guidance to note the potential for such conflicts.

• ACPM

Stakeholder expressed concern with the existing language as it related to an administrator’s role with respect to investment decision-making.

FSRA has not revised paragraph 6.1 as it does not believe the existing language implies an administrator has no role in investment decisions, but rather identifies that in some cases service providers may perform investment activities for the pension plan.

• OBA

Stakeholder expressed concern with the existing language in a footnote regarding service providers and liability limitations as there may be limits to bargaining power of smaller plans negotiating with certain service providers.

While FSRA appreciates the comment regarding service providers contractual negotiations on liability limitations in footnote 19 under paragraph 6.3, FSRA’s view is that this does not change the general position that plan administrators should consider potential implications as described in the Guidance.

• OBA

Stakeholder expressed concern with the existing language in a footnote on sponsor expenses that may not recognize the governance structures of different plan types and that the case law referenced may not be helpful or applicable to most pension plans.

FSRA has revised the language in paragraph 7.1 and footnote 23 to further clarify the Guidance as it relates to plan expenses.

• ACPM
• OBA

Stakeholders expressed concern that the existing language in footnote relating to circumstances where the administrator cannot produce a record of payment.

FSRA’s view is that maintaining relevant records is a factor that should be taken into consideration when determining whether the administrator has satisfied its duty of care and that, as stated in the Guidance, failure to do so may be a breach of its obligations depending on the circumstances.

The intent with the original language was only to identify for administrators that there may be a risk that administrators may be required to pay amounts where they do not have records demonstrating that the obligation has already been satisfied. FSRA has revised language in footnote 24 under paragraph 8.2 to further clarify.

• ACPM
• Mercer
• OBA

Stakeholders have requested inclusion of additional direction as it relates to records retention periods.

FSRA appreciates stakeholder comments requesting certain additional direction be included in paragraph 8.4.

Paragraph 8.4 is intended to include a list of elements that plan administrators should consider in exercising their discretion and not to be an exhaustive list of examples or a prescriptive statement as to what timelines or format of record retention may or may not be appropriate for different types of records.

FSRA recognizes that there may be additional considerations with the use of electronic document storage, such as cyber risk, that should be reflected in decision-making on how documents are maintained and has revised the language in paragraph 8.4 to reflect this.

• ACPM
• Mercer
• OBA

Stakeholders have expressed concern with the existing language that references how a beneficiary should “feel” respected and suggested its removal as it is difficult to assess.

FSRA appreciates these comments and has revised this language in paragraph 9.2 accordingly.

• ACPM
• Mercer
• OBA

Stakeholders have expressed concern with the statement that expects administrators to direct beneficiaries to FSRA where a complaint is not satisfactorily resolved as it is not a mandatory PBA requirement.

The intent of this statement was to highlight that administrators may inform beneficiaries of the complaints resolution process available through FSRA as an option and not necessarily to direct the complaint to FSRA. FSRA has revised the language to provide clarification in paragraph 9.3.

• OBA

Stakeholder has expressed concern that FSRA’s interpretation may require the administrator to provide additional content in order to demonstrate compliance with the PBA’s standard of care.

The intent of paragraph 10.1 is to set out FSRA’s interpretation of how plan administrators should communicate plan changes and existing legislative requirements. As such, FSRA does not believe any changes are necessary to this paragraph.

• ACPM
• Mercer
• OBA

Stakeholders have expressed concerns with certain language as it relates to requirements when providing information to beneficiaries.

FSRA appreciates comments from stakeholders relating to section 10 overall. FSRA has revised the language in paragraph 10.2 and added a footnote to clarify its intended meaning.

However, FSRA remains of the view that administrators must provide information to beneficiaries that is clear, accurate, and reflects changes made to the plan within a reasonable period of time and in plain language. FSRA also notes that administrators are well placed to exercise their fiduciary judgment as to what constitutes plain language in a particular circumstance.