Dec 2, 2016
According to a recent article in Benefits Canada, missing members present an ongoing and significant challenge for pension plan administrators. In the article, Michael Chen describes the difficulties plan sponsors face trying to track down members who have stopped working – particularly those who elected to defer receiving their pension benefits as opposed to transferring their accrued entitlements out of the plan. Jon Marin, an associate in Osler’s Pensions and Benefits Department, comments on what he refers to as a “challenging and potentially costly” issue.
“[M]ore and more with increased job mobility, there can be a significant period of time between when the employee terminates employment and when they become eligible to receive a pension,” says Jon, explaining why the member’s contact information may be out of date.
In the past, plan administrators could turn to the national search unit of Human Resources Development Canada for help finding missing members, but that unit no longer exists. Jon indicates that legislative options also exist to address the problem.
“In some jurisdictions – for example under the federal Pension Benefits Standards Act – they’ve enacted provisions that say the minister may, with the approval of the governor in council, designate an entity for the purposes of receiving and holding the pension benefit credit of a person that can’t be located,” he says.
Read Michael Chen’s full article “Pension industry hamstrung in efforts to find missing plan members” in the November 15, 2016 issue of Benefits Canada.