In this Pensions Update
- 20% penalty waiver on late PBGF assessment payments is ending on December 31, 2020
- Meet Jennifer Rook, FSRA’s Head, Pension Operations & Regulatory Effectiveness
- IPPs and DPs can now elect to be exempted from the PBA
- Our final Missing Members Guidance is now posted
- Revised CIA standards for determining pension plan commuted values
- Reminder on our Guidance: Approach to Requirements After Certain Annuity Purchases for Defined Benefit Plans
- Uploading your most current plan text to the Pension Services Portal
- Heads up: A new DC wind-up process is in the works
20% penalty waiver on late PBGF assessment payments ends December 31, 2020
On January 1, 2021, the regulation temporarily waiving the 20% penalty payable on late PBGF assessment payments will expire. Assessments that have not been paid by December 31, 2020 and which qualified for the penalty being waived until then, will have the 20% penalty applied to them.
Please note that your PBGF Assessment Certificate filing and payment due date is nine months after the last day of a pension plan’s fiscal year end. Extensions granted on PBGF Assessment Certificate filings do not apply to your PBGF payments.
As a reminder, prior to January 1, 2021, Regulation 187/20 amending Regulation 909 waives the 20% penalty payable on late PBGF assessment payments if the assessment amount plus interest is paid on or before December 31, 2020. Although the regulation waived the 20% penalty on late payments, interest still accrues on the outstanding amount, as of the due date (which is nine months after the last day of a pension plan’s fiscal year end).
For more information, see question #22 of FSRA’s Pension Sector Emergency Management Response.
Paying Your PBGF Assessments
FSRA has moved the processing of PBGF assessments to Royal Trust Corp. If an assessment is payable, please print the assessment invoice and be sure to mail the cheque and assessment invoice to the address included on the invoice which is:
ROYAL TRUST CORP IN TR FOR THE PENSION BENEF. GUAR.-P.ONTARIO
PO BOX 9501, STN A
TORONTO, ON M5W 2K3
The cheque should be made payable to “Pension Benefits Guarantee Fund”.
Meet Jennifer Rook, FSRA's Head, Pension Operations & Regulatory Effectiveness
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Driving process changes in the middle of covid-19
In April, Jennifer Rook joined the FSRA’s Pension team as Head of Pension Plan Operations and Regulatory Effectiveness. The Pension Operations team is key to fulfilling FSRA’s mandate to promote good administration of pension plans and to protect and safeguard the pension benefits and rights of pension plan beneficiaries. Part of this work includes improving regulatory effectiveness by streamlining processes and leveraging technology and reducing regulatory inefficiencies where appropriate.
Coming from the Ministry of Finance where she held the role of Director, Pension Policy Branch, Jen provides direction in the development, implementation and leadership of Pension Operations strategies, frameworks, processes, tools and services to further FSRA’s mandate. Jen talks about what it was like joining FSRA in the middle of a global pandemic and what is in the pipeline for Pension Operations.
Q. How did your role at the Ministry of Finance prepare you for your role at FSRA?
A. At the Ministry of Finance, I was primarily responsible for leading a team in developing policy for and implementing changes to the legislative framework for Ontario registered pension plans. I have a clear understanding of the reasons behind the legislative framework which is incredibly helpful given FSRA’s focus on principles-based regulation.
I continue to have strong relationships within government, a thorough understanding of government processes and an appreciation for the issues the government may have an interest in. I hope these factors will assist the Pensions team at FSRA in navigating its initial years.
You had to hit the ground running when you joined FSRA in April, how did covid-19 impact Pension Operations?
A. Covid-19 has been an incredible challenge for the Pension Operations and Regulatory Effectiveness team. Prior to the pandemic, Pension Operations relied almost entirely on paper files. Just before I joined FSRA, the entire operations team was issued laptops, packed up what was possible and began working entirely from home. In a few short days, the team had to transform almost all its processes and practices.
Add to that the need to continue processing the thousands of inquiries and transactions that come in and balancing work with unexpected family demands. It has been a busy year for everyone.
Despite the challenges, there have been silver linings. Joey Shiner, Shawn Roche and David Pahn diligently attended the office throughout, doing whatever was necessary to allow the rest of the team to continue addressing inquiries and reviewing and processing various transactions.
Moving from paper files to electronic records
The team, and Joey, Sharon Polischuk, Kaithlyn Cuartero and Hashim Iqbal in particular, have worked throughout the summer and fall to pack up files to prepare them to be transformed from paper files to a digital library!
And we are currently updating the Pension Services Portal to allow us to receive various applications electronically, cut down our review times and deliver more timely responses and approvals to plan administrators and plan beneficiaries.
Q. How did the pandemic accelerate the adoption of digital technologies for your team?
A. Leveraging technology was already a priority. The pandemic brought that priority into even clearer focus moving it beyond the large projects. In almost everything we do there is likely a digital solution we could leverage to improve our regulation of pension plans.
Q. Improving regulatory efficiencies and effectiveness is one of FSRA’s priorities. Can you share some of the initiatives that will improve service levels and streamline processes?
A. We are reviewing our processes more broadly. This will take some time, but it is a matter of looking at what we do, and why we do what we do.
Coming soon - Paying your PBGF Assessments electronically
A great example of this is our work on the Pension Benefits Guarantee Fund Assessment process. We are working to find a solution to allow pension plans to remit payment electronically, as opposed to by cheque. This will be a more modern and facilitative way for plan administrators to remit their payments. Streamlining of processes allows us to refocus our time and effort on inquiries and reviewing and approving transactions which will improve our services levels.
Q. How are you developing your team to meet the challenges of the ever-changing regulatory landscape?
A. The Pension Operations and Regulatory Effectiveness team reviews several complex applications and transactions. As the pension landscape shifts, those transactions are likely to become more complex. On top of that, we receive an incredibly high volume of transactions and inquiries annually.
Over the last few months, we have begun shifting some of our work to multi-disciplinary teams that bring together pension expertise from across all of Pensions and develops specific expertise. This allows everyone to engage in a discussion on challenging issues or more complex situations, continue to evolve as a team as a principles-based and outcomes-focused regulator and to hear the different perspectives. I think being part of the discussion where a decision is made is also important for overall engagement, alignment to the vision and our ability to deliver on our mandate.
IPPs and DPs can now elect to be exempted from the PBA
The Government of Ontario amended the Pension Benefits Act (PBA) to allow employers of certain individual pension plans (IPPs) or designated plans (DPs) to elect to exempt their plans from the application of the PBA, its regulations and FSRA’s rules.
Employers who wish to exempt their IPPs or DPs from the PBA must complete and submit a PBA Exemption Election Form and the applicable consent forms to FSRA. The forms will be available on the FSRA website next week. For more information, please visit or contact Pension Inquiries at: [email protected].
Our final Missing Members Guidance is now posted
The public consultation on our Missing Members’ Guidance closed on September 20, 2020. Thank you to everyone that provided their feedback and to our Missing Members Technical Advisory Committee who worked with FSRA to develop the Information and Approach Guidance.
We have carefully considered all the input and have now published the final Guidance Principles and Practices Regarding Missing Members
Data collection update
FSRA began collecting aggregate data on missing members from plans this summer on a voluntary basis – at the time that a plan is filing its Annual Information Return
Revised CIA standards for determining pension plan commuted values
Ontario pension regulations were amended in December 2019 to provide for the determination of commuted values in accordance with section 3500 of the Standards of Practice of the Actuarial Standards Board (“ASB”), published by the Canadian Institute of Actuaries, as amended from time to time (“Section 3500”).
The ASB amended Section 3500 and released them as Final Standards with an effective date of December 1, 2020 (“New CV Standard”). We would like to remind plan administrators that Section 3570 of the New CV Standard, applicable to MEPPs and Target benefit plans, is not applicable when determining commuted values for Ontario-regulated members of those plans.
Plan administrators and their agents should ensure that the New CV Standard is applied when determining commuted values with calculation dates on or after December 1, 2020. The most significant assumption changes in the New CV Standard are in respect of the applicable discount rates and the pension commencement age.
Plan administrators should provide information on the assumptions and methodology used to determine the commuted value to former members so that they can make an informed decision when electing between a deferred or immediate pension or taking a commuted value transfer.
Plan members should be encouraged to seek independent financial advice and consider all relevant factors before making important financial decisions.
Reminder on our Guidance: Approach to Requirements After Certain Annuity Purchases for Defined Benefit Plans
In October 2019, FSRA published its Approach to Requirements After Certain Annuity Purchases for Defined Benefit Plans.
The Guidance outlines FSRA’s supervisory approach regarding certain requirements associated with the defined benefit (DB) provision of a pension plan, which is frozen and has purchased annuities in respect of all of the DB entitlements under the plan and almost all of those annuities meet the requirements of Section 43.1 of the Pension Benefits Act (PBA).
FSRA’s supervisory approach is to consider on a case-by-base basis the regulatory benefit of DB filing requirements and whether specific burden relief may be warranted.
The Approach guidance outlines, as an example, a set of circumstances, where FSRA may consider burden relief from certain PBA filing requirements.
Plan administrators must first contact FSRA to determine if this Approach guidance applies to their plan. In the absence of written confirmation from FSRA that this Approach guidance is applicable in advance of the relevant filing deadline, all required statutory filings required under the PBA will be expected to be filed on time.
Help us help you! Uploading your most current plan text to the Pension Services Portal
We are continuously working to improve our regulatory effectiveness and that includes providing timely responses and review of applications to FSRA. You can help! We are asking plan administrators to please upload their current plan text (and any amendments to it) to the Pension Services Portal.This will help improve our business operations by increasing the availability of your information for our staff and helps us to engage with you in a more meaningful and efficient way.
Heads up: A new DC wind-up process is in the works
Over the last few months, we have been working with FSRA’s IT team to automate our process for applications to wind-up a defined contribution (DC) plan. Completing wind-up applications quickly whenever possible, is part of our ongoing work to improve efficiencies for the sector.
A new wind-up team (for DB and DC wind ups) is also being established to support the revised process and improve the existing workflows. We will be providing more details on the new process in mid-January along with other IT updates that are in the pipeline.