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CAPSA issues draft revised electronic communications guideline for pension plans

On November 1, 2018, the Canadian Association of Pension Supervisory Authorities (CAPSA) issued for public comment a newly revised draft Guideline No. 2 – Electronic Communications in the Pension Industry (the Draft Guideline). The purpose of the Guideline is to provide a set of principle-based industry standards and best practices for pension plan administrators to adopt, in conjunction with legislative requirements, as part of their electronic communications (i.e., e-communications) framework. The Draft Guideline will replace the 2002 version of the same document.

Forms of member consent

The Draft Guideline encourages the use of e-communication as a default option for exchanging information with members, where permitted by legislation, or at least to recognize deemed consent by members to e-communication. However, some jurisdictions require express consent of plan members.

Where the pension legislation permits deemed consent, the designation of an information system to the plan administrator is enough to provide for deemed consent.

The list of information required to be provided to members at the time of either deemed or express consent, has been reduced. CAPSA simply states that the member must be informed that they have the right to revoke consent.

Presentation of information

The Draft Guideline now only specifies that the e-communication “must mirror the content of the paper copy”. This differs from the previous version which required that the electronic document be in the “same or substantially the same form as the written document” and effectively permits the information to be presented in a different way electronically versus a printed document.

Security and provision of information electronically

The Draft Guideline states that e-communication is presumed to be provided when made available on an information system that the recipient has designated to receive, and is capable of being retrieved and processed by the recipient (for example, by sending an email). If documents are to be posted on a website, the plan administrator must notify recipients of the release of such information and the relevant details of how to access this information. Confidential information should only be accessible by means of a password or other unique identification system.

CAPSA also advises plan administrators to consider and implement, on an on-going basis, a protocol to protect the security of information that is sent and retained, and a protocol to retrieve lost or corrupted data.


Comment

Much has changed since the release of the original version of the Draft Guideline. Technology has developed and a number of Canadian jurisdictions have adopted legislation respecting e-communications in pension plans since 2002 and, where legislation exists, it must be complied with.

The Draft Guideline provides welcome updates to the previous guideline. In particular, the language respecting consent as a default option and deemed consent is useful. It is also useful to recognize that often information will be posted on a member website rather than being sent directly.

Unfortunately, in some cases, the legislation is more restrictive than the Draft Guideline. It is to be hoped that such legislation will be updated in the future taking into account the final version of the Draft Guideline.

The deadline for public submissions on the Draft Guideline was December 13, 2018.


News & Views - December 2018 (PDF)