Alert: FSRA Releases Pension Sector Emergency Management Response

The Financial Services Regulatory Authority of Ontario (FSRA) has released new guidance for pension sector stakeholders and plan members during the COVID-19 pandemic, which adds to previous guidance from FSRA as discussed in our March 2020 Blakes Bulletin: Considerations for Pensions and Benefits During COVID-19.

FSRA has provided new guidance on a number of its responses to questions received from pension stakeholders, and in particular, has indicated that:

1. It is FSRA’s understanding that the Ontario government’s March 20, 2020, order under the Emergency Management and Civil Protection Act (Ontario) suspending statutory time periods within which steps must be taken in a proceeding or intended proceeding impacts matters before the courts or the Financial Services Tribunal and matters that are subject to a “notice of intended decision” (NOID). NOIDs under the under the Pension Benefits Act (Ontario) (PBA) will generally not be issued, except that FSRA will retain discretion to proceed with NOIDs and exercise such discretion in limited circumstances where the benefit of proceeding outweighs any potential prejudice.

2. FSRA has confirmed that a certified copy of an amendment or board resolution when filing a plan amendment may be submitted electronically through the FSRA portal or via email to the pension officer for the plan. The submission or email must indicate that the certified copy of the document being submitted electronically is a true and complete copy of the original document.

3. FSRA has no discretion over the requirements to send member communications, including sending communications by electronic means where administrators may not be able to send communications by regular mail within the timeframe established by the PBA or its regulations. However, FSRA has indicated that where a plan administrator has advised FSRA of the challenges that it is facing relating to member disclosures and a reasonable proposed plan of action, it will not levy administrative monetary penalties with respect to late member communications that are due prior to September 1, 2020, or as otherwise agreed with a plan administrator or their agent.

4. FSRA considers the significant stock market and economic decline in 2020 to be a “subsequent event” in preparing an actuarial valuation report for funding purposes as at December 31, 2019. FSRA has also included a discussion of its expectations regarding disclosures that should be included in such valuation reports.

5. For plan sponsors wishing to file an “off-cycle” actuarial valuation with an effective date of December 31, 2019, that would otherwise be required to be filed by September 30, 2020, FSRA has indicated that it will provide filing extensions while businesses are operating under COVID-19 emergency conditions. However, FSRA has also noted that for both on- and off-cycle valuations, it has the power to order an administrator to prepare a new valuation report if the assumptions or methods used in the preparation of a report required under the PBA or regulations thereunder regarding the pension plan are inappropriate or are not consistent with accepted actuarial practice. FSRA may also specify the assumptions and methods to be used.

For further information, please reach out to a member of our Pensions, Benefits & Executive Compensation group or your usual Blakes contact.