1. Trends in Canadian pension regulation and supervision
Susan Bird, May 10, 2017
Montreal, Quebec

2. 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

3. 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

4. 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

5. 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
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Montreal May 10, 2017 5

6. 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

7. 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

8. 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

9. 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

10. 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

11. Federal pension supervision
Identify risk
Identify controls
Identify oversight
= Overall Net Risk
Trends in Canadian pension regulation and supervision
Montreal May 10, 2017 11

12. 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

13. 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
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Montreal May 10, 2017 13