Supervisory Approach to Defined Benefit Asset Transfers under the PBA summary of commentary | Financial Services Regulatory Authority of Ontario

Summary of commentary

Topic	Organization	FSRA Comments
General	Mercer, Ontario Bar Association (OBA), Willis Towers Watson (WTW), Colleges of Applied Arts and Technology Pension Plan (CAAT), OPSEU Pension Trust (OpTrust), The Association of Canadian Pension Management (ACPM).	FSRA thanks and appreciates the participation and input submitted by these organizations. All submissions assisted us to improve the guidance and promote a clearer understanding of FSRA’s approach to defined benefit asset transfers under the PBA.
1. Purpose and Scope	OBA, WTW	FSRA appreciates the comments and suggestions regarding the title to the guidance. We have amended the name of the guidance to reflect such comments.
	OpTrust	FSRA appreciates comments and suggestions regarding s. 80 of the PBA and s. 13 of Reg. 310/13. FSRA appreciates comments and suggestions regarding OpTrust comments on asset transfers under section 80.4, we did not amend the current framework since current “Transfer Regulations” cover scenarios where plan assets are transferred between JSPPs.
2. Rationale and Context	Mercer	FSRA values the comments and suggestions regarding adjusting the guiding principle to ensure that beneficiaries understand the impact of asset transfer applications on benefit entitlements. FSRA’s Guidance Framework ensures that all guidance is reviewed periodically to ensure effective regulation.
	OBA	FSRA appreciates all comments on regulatory burden related to asset transfer applications. The new supervisory approach is intended to facilitate an expeditious review process. We are committed to foster an open and constructive dialogue with the pension sector.
3. Principles	CAAT, WTW, Mercer	FSRA appreciates comments and suggestions regarding the financial sustainability of plan sponsors and experience working with asset transfers. We have reviewed all the comments and addressed them where possible. With respect to our focus on the financial stability of plan sponsors, this is an important element of our regulatory due diligence process.
4. Processes and Practices	WTW, OBA, Mercer	FSRA thanks the input on fiduciary responsibilities of advisors, Administrators and Sponsors. We have carefully reviewed all comments and addressed them when possible. The review process confirms that applications meet the requirements of the PBA and that the outcomes of the asset transfer process are consistent with FSRA’s mandate to protect and safeguard the rights of plan members and beneficiaries.
Asset Transfer Process Preparing for an application	Mercer	FSRA appreciates the comments and suggestions from Mercer regarding the discussion of regulatory issues prior to submitting an application. We have amended the guidance to provide additional context on unresolved regulatory issues administrators should discuss with FSRA.
Asset Transfer Process Preparing and issuing notices	WTW	FSRA appreciates the comments and suggestions from WTW, regarding FSRA’s powers to modify the timing of notices. We have modified the guidance to outline the fact that applicants can request from FSRA a variance in the notice timing and contents. A new section was also added regarding beneficiaries impacted by asset transfers.
Asset Transfer Process Preparing and filing amendments	OBA, Mercer	FSRA appreciates comments and suggestions regarding adverse amendments and requirements to notify members prior to the effective date of such amendments. We have reviewed all the comments and addressed them where possible.
Asset Transfer Process Considering the treatment of any outstanding letters of credit	Mercer, WTW	FSRA appreciates the comments and suggestions regarding dealing with Letter of Credits (LOC’s) in the context of an asset transfer. We have reflected on all of the comments received and amended the guidance to respond to the clarifications outlined in the response to the consultation. For example, FSRA has added a section to note about the possibility to amend and transfer LOC’s to receiving plans.
Asset Transfer Process Submitting the application	OBA, Mercer	FSRA appreciates the comments and suggestions regarding the publication of the circumstances when discretionary extensions are granted. We have adjusted the guidance to remove the wording in relation to FSRA’s intention to publish the circumstances surrounding discretionary extensions.
Asset Transfer Process Reviewing the application for compliance	Mercer, WTW	FSRA appreciates the constructive comments received around notifying applicants when more detailed reviews are required, we are committed to embedding this practice in the execution of our reviews. We are also pleased with the positive outlook regarding FSRA’s commitment to process complete applications within 150 days.
Asset Transfer Process Consenting to the application	WTW, CAAT, Mercer, ACPM, OBA	FSRA values the comments and suggestions regarding the use of NOIDs when refusing or approving transfer applications. We have reviewed the comments and, where possible, amended the guidance to reflect this input and clarify certain elements. For example, we have clarified when FSRA must use the NOID process. See FSRA’s Consent to SEPP-to-JSPP Transactions under sections 80.4 and 81.0.1 of the Pension Benefits Act.
Asset Transfer Process Filing of documents /reports after FSRA’s consent	ACPM, Mercer, WTW, OBA	FSRA appreciates the comments and suggestions. We have reflected on all of the comments received and amended the guidance to respond to the clarifications outlined in the response to the consultation. For example, FSRA has modified language to clarify filing and financial requirements for original plans.
5. Variance of Notice Timing and Content	WTW, Mercer, ACPM, OpTrust, CAAT, OBA	FSRA appreciates all considerations regarding the timing and content of notices. We have reflected on all of the comments received and amended the guidance to respond to the clarifications outlined in the response to the consultation. Specifically, we have addressed the following issues: Clarification on the type of plans that can apply for a waiver or notice variance Description of FSRA’s approach to review applications to waive or vary notice requirements Definition of elements to be included in waiver and variance applications
6. Multi-Jurisdictional Asset Transfers	ACPM, CAAT, OBA	FSRA appreciates the comments and suggestions regarding the review process of applications involving members from multiple jurisdictions, including applications involving Jointly-Sponsored Pension Plans. We have reflected on all of the comments received and amended the guidance. For example, FSRA has provided additional context on circumstances that could impact review times.
7. Effective Date and Future Review	WTW, OBA, Mercer, OpTrust	FSRA appreciates the comments and suggestions regarding related Policies and Frequently Asked Questions. We have reviewed the guidance to include additional Policies that will become inactive once this guidance becomes effective. Inactive policies will remain available on FSRA’s website.
Forms-Application Summaries and Actuary’s Certifications		FSRA appreciates the comments and suggestions regarding these forms. We have reviewed all the comments and addressed them where possible. For example, we have amended the Asset Transfer Application Summary to clarify the type of “transfer agreement” documentation required by FSRA. Section 5 of the Summary “Notices and the level of Consent/Objection” was also modified to streamline the Form.