Trends in Canadian pension regulation and supervision Susan Bird, May 10, 2017 Montreal, Quebec
Regulatory environment Pension regulation Federal Income Tax Act Federal Pension Benefit Standards Act Provincial pension benefits acts Other regulation (privacy, workers compensation, human rights) Trends in Canadian pension regulation and supervision Montreal May 10, 2017 2
Trends in Federal Pension regulation and supervision Consideration of target benefit plans Failure to recognize role of bargaining agents Consideration of making target benefits available to single employers Some acknowledgement that current solvency funding regime is not working Trends in Canadian pension regulation and supervision Montreal May 10, 2017 3
Trends in provincial pension regulation Regulators accepting target benefit plans for multi employer plans The largest regulator (Ontario) is behind – no legislation yet – not a leader in this area Some provinces have introduced shared risk/target benefits Trends in Canadian pension regulation and supervision Montreal May 10, 2017 4
Trends in provincial pension regulation As expected as part of the introduction of target benefits, regulators have introduced regulation that plans must Have written governance policies Have written governance compliance reviews Have written funding and benefits policies Trends in Canadian pension regulation and supervision Montreal May 10, 2017 5
Trends in provincial regulation Some synchronicity of regulations between provinces on: Vesting Funding – gradual move to target/shared risk Governance policies Still a long way to go Trends in Canadian pension regulation and supervision Montreal May 10, 2017 6
Trends in pension supervision (provincial) Progressive regulators move to risk based supervision Risks: Funding Investment Operational Governance Industry Provincial risk based assessment Key items Trends in Canadian pension regulation and supervision Montreal May 10, 2017 7
Trends in pension supervision (federal) Significant activities Administration Communications to members Asset management Actuarial Trends in Canadian pension regulation and supervision Montreal May 10, 2017 8
Risk indicators Trends in Canadian pension regulation and supervision Annual filings Financial statements Actuarial reports Plan amendments Trends in Canadian pension regulation and supervision Montreal May 10, 2017 9
Trends in pension supervision: supervisory process Ongoing monitoring and review In depth review intervention Trends in Canadian pension regulation and supervision Montreal May 10, 2017 10
Federal pension supervision Identify risk Identify controls Identify oversight = Overall Net Risk Trends in Canadian pension regulation and supervision Montreal May 10, 2017 11
Federal risk based supervision Overall net risk + solvency + funding = Composite risk rating (CRR) Trends in Canadian pension regulation and supervision Montreal May 10, 2017 12
Tools for supervision Tool box Plan examination Early valuation Additional disclosure to members Meet with regulator Freezing portability Additional scenario testing Bring an action against administrator Direct compliance Remove the administrator Revoke registration Terminate the plan Trends in Canadian pension regulation and supervision Montreal May 10, 2017 13