Pension Update - August 16, 2022
In this Pension eBlast
- Consultation on Proposed Guidance on Pension Plan Amendments
- Consultation on Proposed Guidance on Actions to Avoid Deregistration of a Pension Plan Under the Federal Income Tax Act
- FSRA Releases Q2 2022 Solvency Report
- FSRA Releases 2021 Report on the Funding of Defined Benefit Pension Plans in Ontario
- New Process: List of Late Filers
- New Process: Mandatory Portal Use for Submissions Begins January 1, 2023
- Reminder: Administrative Monetary Penalties (AMPs) Rollout
- Reminder: Paying Your Pension Benefits Guarantee Fund (PBGF) Assessment Electronically
- Reminder: Call for New Members for Pensions Standing Technical Advisory Committees
- Update: Pay Your Pension Plan Registration Fee Through FSRA’s Online Services Portal
- Update: Cyber Security Pulse Survey – Coming Soon
- Update: Canadian Association of Pension Supervisory Authorities (CAPSA) Consultations & Call for Members for Risk Management Industry Working Group
Consultation on Proposed Guidance on Pension Plan Amendments
To help ensure pension plan administrators are following the provisions of the Pension Benefits Act, FSRA is releasing proposed Guidance on Plan Amendments for consultation.
Consultation on Proposed Guidance on Actions to Avoid Deregistration of a Pension Plan Under the Federal Income Tax Act
FSRA is supporting pension plan administrators, sponsors and members by releasing proposed guidance that clearly identifies the documents, timeframes and information that are required under exemptions from the Pension Benefits Act to avoid a plan’s deregistration under the Income Tax Act, including:
- providing written notice to FSRA
- pension plan member communication
- other considerations, such as certification, exemptions and requests for more information
FSRA Releases Q2 2022 Solvency Report
This Report finds that after eight consecutive quarters of steady improvement in the median solvency ratio since March 2020, a majority of pension plans saw a slight decrease in the solvency funded status in the second quarter of 2022 as asset losses surpassed shrinking liabilities.
- the median projected solvency ratio was 110% as at June 30, 2022, decreasing from 112% as at March 31, 2022
- Investment returns were negative for the quarter in all major asset classes, resulting in pension funds averaging a net return of -10.9%. However, solvency discount rates increased to a level not seen for over a decade, helping to reduce liabilities and largely offsetting the impact of declining capital market values over the quarter.
FSRA Releases 2021 Report on the Funding of Defined Benefit (DB) Pension Plans in Ontario
This Report provides pension stakeholders with funding, investment and actuarial information on the registered DB pension plans we regulate. Highlights of this year’s Report include (with comparisons to 2020):
Projected median going-concern funded ratio as at Dec. 31
Projected median solvency ratio as at Dec. 31
- the average going-concern discount rate decreased significantly from 5.09% (for valuations between July 1, 2017 to June 30, 2018) to 4.20% (for valuations between July 1, 2020 to June 30, 2021)
- Listed Jointly Sponsored Pension Plans (as defined in the regulations) have substantially higher allocations to alternative investments (average of 31% vs average of 9% for single employer and multiemployer pension plans)
- The average net investment return was 11.24% for plans with assets of over $1 billion (other than the Listed Jointly Sponsored Pension Plans), representing a higher investment return compared to smaller plans. For example, the average net investment return was 7.64% for plans with less than $10 million in assets
- there continues to be a trend of decreasing membership in single employer plans and increasing membership in Listed Jointly Sponsored Pension Plans and multiemployer pension plans
Asset Transfer and Wind Up Applications – How is FSRA Doing?
We’re pleased to share an update on how our collaborative approaches internally and with the sector have helped us clear Asset Transfer and Wind Up Application backlogs and significantly improve our average processing times.
Do you a have feedback on your improved experience? We invite you to share your comments with Tim Thomson. We will include your feedback in an upcoming eblast.
FSRA has also being working to streamline the filing and registration process for amendments. Earlier this year, FSRA launched a new Form 1.1 on the Pension Services Portal. This new process streamlines our processes and will significantly reduce the time required to register plan amendments. We have also assembled a team to review backlogged amendments which have not yet been registered.
New Process: List of Late Filers
It is important that plan administrators submit their statutorily prescribed filings to FSRA on time. Later this year, FSRA intends to begin publicly disclosing names of pension plans that have missed filing deadlines. To avoid your plan being on the list of late filers, please submit your filings on time.
New Process: Mandatory Portal Use for Submissions Begins January 1, 2023
Starting January 1, 2023, FSRA will move to mandatory use of the Pension Services Portal (PSP) for the following applications:
- Filing extensions
- Re-filing request
- DC Wind Up
- Contact change requests
- Request to file a SIPP amendment or restated SIPP
- Biennial Member Waivers
- Wind up interim payment
- Plan viewing/ photocopy request
- PBGF refund request
- Letters of Credit
- Annuity discharge
- Refund of excess contributions – revocation exemption (RCE)
- Commuted value section 19
- DB refund of overpayment to employer
- SOMEPP – Notice
- SOMEPP – Election
- DB refund of member contributions
- DC refund of member contributions
In the coming weeks, additional applications will be added to the PSP, which also must be submitted through the PSP, starting January 1, 2023:
- DB Windup Full
- DB surplus refund full windup
- DC surplus refund full windup
- Windup Notice
- Amendment – Early Retirement Window
- Amendment – Conversion
Reminder: Administrative Monetary Penalties (AMPs) Rollout
As previously communicated, FSRA has recommenced its processes for following-up on outstanding filings. These processes include levying AMPs, where appropriate. FSRA will employ a phased approach to compliance with legislative filing requirements.
To avoid the risk of regulatory action please ensure your processes and filings are up to date. Plan administrators that fail to comply with FSRA’s compliance requests for outstanding filings may be charged an administrative monetary penalty.
Reminder: Paying Your Pension Benefits Guarantee Fund (PBGF) Assessment Electronically
Plans can remit PBGF assessments electronically, using Corporate Creditor, which is the same electronic payment program used for paying FSRA assessments. Note that “Pension Benefits Guarantee Fund” must be added as a payee.
As a reminder, PBGF assessment certificates must be filed nine months after the fiscal year end of a pension plan. The payment due date for PBGF assessments is the same as the due date for filing the PBGF assessment certificate. Note that extensions granted on PBGF Assessment Certificate filings do not apply to your PBGF payments; there are no payment extensions available.
Late payments will be subject to the legislated 20% penalty and interest charges. Unpaid balances may also be pursued by a third-party collection agency on behalf of FSRA.
Please contact [email protected] if you require assistance using the e-payment option.
If you are remitting payment by cheque please make your cheque payable to “Pension Benefits Guarantee Fund” and have it mailed to the address indicated on your PBGF Assessment Certificate.
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 David Bartucci. 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.
Update: Pay Your Pension Plan Registration Fee Through FSRA’s Online Services Portal
In FSRA’s continued effort to provide digital solutions for the Pension Sector, a pension plan’s registration fee can now be paid online via FSRA’s Online Services Portal. Simply enter the Online Services Portal, attach your Registration Form (Form 1) and pay securely. Payment methods accepted are VISA, Mastercard or Interac Online.
Update: Cyber Security Pulse Survey – Coming Soon
Plans are increasingly relying on technology for asset management, and personal and confidential data collection, making them potential targets for cyber attacks. Over the next few weeks, we’ll be reaching out to a cross-section of plans with a short survey about cyber security to help us better understand how cyber risks are being managed. We will share our findings during a webinar in the fall. The Canadian Association of Pension Supervisory Authorities is also seeking feedback on a Cyber Risk for Pension Plans Guideline until September 15, 2022.
Update: Canadian Association of Pension Supervisory Authorities (CAPSA) Open Consultations & Call for Members for Risk Management Industry Working Group
Provide your feedback on CAPSA draft Guidelines open for public consultation until September 15, 2022:
- Guideline: Environmental, Social and Governance Considerations in Pension Plan Management
- Guideline: Leverage and the Effective Management of Associated Risks
- Proposed Approach: Risk Management Guideline
- Guideline: Cyber Risk for Pension Plans
CAPSA’s Risk Management Guideline Committee is seeking participants for a Risk Management Industry Working Group. Read the Terms of Reference for details on the selection process, membership, and mandate.
Technical Advisory Committees meeting summaries
- June 16: Standing Technical Advisory Committee for Multi-Employer Pension Plan meeting
- June 23: Standing Technical Advisory Committee for Public Sector Pension Plans meeting
- June 28: Standing Technical Advisory Committee for Defined Contribution Pension Plans meeting
- June 29: Standing Technical Advisory Committee for Defined Benefit Single Employer Pension Plans meeting
- Pension Sector Calendar
- FSRA Pension Publications