FSRA Changing its Process for Providing Regulatory Consent to Asset Transfers
TORONTO, October 22, 2020 – The Financial Services Regulatory Authority (FSRA) is changing its process for consenting to asset transfers under section 80.4 of the Pension Benefits Act (PBA). An asset transfer occurs when a single employer pension plan is converted and transferred into a jointly sponsored pension plan.
The new process will help support good administration of plans and protect beneficiaries’ interests during this Emergency period.
FSRA’s past practice
Until recently, once FSRA completed its review of an asset transfer request, if the application complied with the PBA, FSRA issued a Notice of Intended Decision (NOID) before consenting to the transfer.
The NOID signaled the beginning of a 30-day period in which impacted persons could contest the proposed consent by requesting a hearing before the Financial Services Tribunal (FST).
If there was no request for an FST hearing within the 30-day period, FSRA issued an order consenting to the application. If an FST hearing was requested, then, generally, no final order was issued until a final decision was rendered by the FST or a court hearing to appeal the FST’s decision.
FSRA’s new process for providing regulatory consent to the proposed asset transfer
Effective immediately, following a 10-day notice period to impacted plan members, FSRA will provide its consent using a letter of consent rather than issuing a NOID followed by an order/consent.
How will this work?
The original and successor plan administrators will be required to provide special notice to members impacted by the proposed asset transfer, inviting them to express to FSRA any concerns regarding the proposed asset transfer. FSRA staff will assist in determining the appropriate language to use in such a notice.
This notice will be posted on the web sites of the transferring and receiving pension plans, or as otherwise agreed upon with FSRA, for no less than 10 business days. If no substantive concerns are raised in this period, FSRA would deliver its consent by letter.
If an applicant would prefer to proceed using the NOID process, that can be arranged by request to FSRA.
This new approach is in accordance with the requirements of the PBA and brings our consent process more in line with other asset transfer transactions under the PBA (i.e., section 80 and 81).
FSRA will monitor how this process works going forward and based on the feedback received may choose to amend it after the Emergency ends. Until further notice this process will continue to apply.
FSRA recently issued draft Guidance that sets out how the regulator will exercise its discretion and may provide its consent for the purposes of an asset transfer transaction under the PBA.
The Guidance is currently out for public consultation until November 30, 2020. The public can submit their feedback at: FSRA Consulting on New Proposed Approach to Pension Asset Transfers.
FSRA is continuing to work with those we regulate to ensure financial safety, fairness and choice for consumers and members. Learn more @ www.fsrao.ca.
For media inquiries:
Senior Communications Officer, Corporate Communications
Financial Services Regulatory Authority of Ontario
Email: [email protected]