Amendments to Ontario’s Pension Benefits Act include changes related to missing members, electronic communications and JSPPs
Wide-ranging amendments to Ontario’s Pension Benefits Act (PBA) came into force on December 10, 2019 when the Better for People, Smarter for Business Act, 2019 (Bill 132) and the Plan to Build Ontario Together Act, 2019 (Bill 138) received royal assent. The bills contain a grab-bag of small but potentially impactful burden reduction measures, many of which warrant consideration by administrators of pension plans registered in Ontario. In this blog post, we highlight certain changes related to missing members, electronic communications, and jointly sponsored pension plans (JSPPs).
Waiving biennial statement in respect of missing members
The Financial Services Regulatory Authority of Ontario (FSRA) may waive the requirement to issue biennial statements to former and retired members if the administrator can satisfy FSRA that the administrator is unable to locate the former or retired member after making “reasonable efforts” to do so. FSRA will evaluate such “reasonable efforts” by considering prescribed factors, which include the amount of the missing member’s pension, the search methods undertaken by the administrator, and the costs related to these searches and any future searches. Once the waiver is granted, it is effective until it is revoked. Revocation is triggered where the plan administrator receives the contact information for the missing member in respect of whom the waiver was obtained. This provision is a welcome change, as previous regulatory practice was to grant a waiver in respect of a specific biennial statement only, such that administrators were required to re-apply for a waiver in respect of any future biennial statements.
Pension plan administrators that have already undertaken searches for missing members may wish to organize themselves in advance of their next scheduled biennial statement date in order to be in a position to provide FSRA with the necessary information, especially as it relates to the costs and efforts undertaken in respect of missing member searches.
Electronic transmission of documents
The amendments permit electronic transmission to become the default method through which pension plan administrators transmit documents required under the PBA to members and former members of a pension plan (i.e. an opt-out system). The amendment accomplishes this by deeming members and former members to consent to electronic forms of delivery where the administrator has provided notice, unless the individual has instructed the administrator that they would like to communicate through non-electronic means. Documents containing personal information which are transmitted electronically are subject to additional protection under the new rules, as they may only be transmitted through a secure information system (such as a secure member portal) which requires the recipient to identify themselves before accessing the document, and meets any other prescribed requirements. Prior to the amendments, the PBA permitted administrators to send notices, statements and other records to members through electronic means if such means complied with the Electronic Commerce Act, 2000 and only if the administrator had obtained the member’s permission to do so.
To take advantage of this amendment, administrators must provide notice via regular mail of the switch-over to electronic communications, and provide certain other required information. A similar written “reminder” notice must also be provided to a member upon his or her retirement. If this reminder is sent, then the administrator can continue to communicate electronically with the retired member, unless instructed otherwise by the retired member.
We encourage administrators to review their member portal websites to ensure compliance with the new requirements, and to prepare the required notices if they wish to begin transmitting documents electronically.
The section of the PBA which governs service and deemed service of documents has also been replaced by rules which account for electronic service, among other things.
Changes regarding jointly sponsored pension plans
The amendments also contain certain changes related to jointly sponsored pension plans, and single employer pension plans (SEPPs) looking to convert to the JSPP model. Specifically, the administrator of a SEPP may now apply to FSRA for consent to an asset transfer in respect of a SEPP-to-JSPP conversion before the JSPP becomes registered under the PBA (provided that FSRA receives the application for registration of the pension plan within 90 days of the date of the asset transfer application). In practice, this will mean that SEPP-to-JSPP conversions may be expedited because the approval process for such conversions may begin sooner than would otherwise be possible.
JSPPs that are administered by boards of trustees are now required to set out the powers and duties of the board of trustees in the documents establishing and supporting the JSPP. Administrators of JSPPs in Ontario should verify whether their plan documents adequately set out the powers and duties of the board of trustees. If such documents do not, then administrators must amend their documents to comply with this requirement.
If you have any questions about the new amendments to the PBA and whether they may impact your plan, please contact any member of Osler’s Pension and Benefits department.