The Financial Services Regulatory Authority (FSRA), which regulates Ontario pension plans, has issued an update to its response to the COVID-19 pandemic. The update, issued March 20, acknowledges that “the normal course of business has been disrupted” and that “business continuity plans have been activated at many workplaces”. We examine the update, including FSRA’s views on filings, member disclosure, transaction applications, and transfer ratios.
FSRA recognized in its update that “pension plan administrators and their agents will likely face challenges in meeting upcoming filing deadlines”. That said, administrators are still required to respect the existing filing extension regime provided for in the Pension Benefits Act (PBA), which allows pension plan administrators and their authorized agents to request a filing extension of up to 60 days beyond the prescribed timeline under the PBA. For extension requests of up to 60 days, administrators should continue to submit requests to FSRA via the Pension Services Portal. If a request is for a period beyond 60 days, FSRA has asked that administrators submit their request by email to their assigned Pension Officer.
FSRA asked that plan administrators who are unable to provide member disclosure information in the timelines prescribed by the PBA (e.g., annual and biennial pension benefits statements, termination statements and retirement statements) to inform their assigned Pension Officer via email as soon as possible. FSRA noted that, while it does not have discretionary powers to extend the prescribed timelines as they relate to member disclosures, “summary administrative monetary penalties will not be levied with respect to non-compliance in this area until further notice”, provided that the administrator has advised FSRA of both the challenges it is facing and its proposed plan of action.
All pending transaction applications filed with FSRA (e.g., pension asset transfers or wind-up applications) will continue to be reviewed by FSRA staff, though FSRA expects some delay in processing applications. FSRA requested that all new applications and related documents be submitted via email and that administrators contact their Pension Officer to make alternate arrangements if electronic submission is not possible.
FSRA noted that, in light of the fact that “financial market conditions are changing very rapidly and may result in significant volatility in the funded status of pension plans,” plan administrators may become aware that the transfer ratio of their defined benefit pension plan has deteriorated by 10% or more. Consistent with Section 19 of Regulation 909 of the PBAand FSRA’s stated prioritization of “the security of pension benefits,” FSRA is continuing to prohibit administrators of a defined benefit pension plan from transferring any part of the commuted value of a pension, deferred pension or ancillary benefit to which a member or former member is entitled without obtaining FSRA’s prior approval where the administrator knows or ought to know that the transfer ratio has fallen by 10% or more since the most recently determined transfer ratio (or if the most recently determined transfer ratio was above 1 and it has fallen to 0.9 or less). Approvals are to be requested using Form 10 and submitted electronically to the plan’s Pension Officer where possible.
Almost all FSRA staff are now working remotely, and FSRA is reviewing its work, stakeholder engagement activities and other commitments to prioritize accordingly. FSRA has asked for patience and understanding as it adapts to new norms and plan administrators should expect delays.
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