Ontario Bill 132 amends electronic communication rules
On December 10, 2019, Ontario Bill 132 received royal assent. Bill 132 amended the Ontario Pension Benefits Act (PBA) to permit pension plan administrators to provide plan member communications electronically on the basis of deemed consent, as well as making other changes that will affect Ontario-regulated pension plans.
Deemed consent to receive electronic communications
Bill 132 enables pension plan administrators to provide certain documents to members, former members and retired members in electronic form based on deemed consent. These changes follow the release of a draft amendment in August 2019, in which it was proposed that the PBA be amended to permit pension plans to use electronic communications as a default communication method for providing information to their members. The draft amendment was summarized in the August 2019 News & Views.
In order to use the deemed consent provisions, the administrator is first required to send a notice by regular mail to the member or former member. The notice must include (1) the date on which the administrator will begin to send documents electronically, (2) the recipient’s last known email address, (3) a statement explaining that the recipient may decide at any time that he or she no longer wishes to receive documents electronically, and (4) any other prescribed information. A member or former member who receives such a notice will be deemed to have consented to receive documents in electronic form, unless he or she instructs the administrator otherwise.
Bill 132 differs from the August 2019 draft amendment in certain respects. While the draft amendment had proposed that deemed consent would expire when the member or former member became a retired member, Bill 132 provides that a retired member can also be sent documents electronically as long as a subsequent notice is provided. When a member or former member who had been receiving documents electronically on the basis of deemed consent retires, the administrator must send another notice, both electronically and by regular mail, setting out the retired member’s last known email address and stating that he or she may, at any time, instruct the administrator to send documents in paper form, as well as including any prescribed information.
The deemed consent provisions in Bill 132 only apply to documents that are required to be provided under the PBA, the regulations or FSRA rules.
Documents containing personal information or any other prescribed information may not be sent electronically unless they are sent through a secure information system that requires recipients to identify themselves, and complies with any other prescribed requirements.
Waiver of requirement to send statements to former and retired members
Bill 132 amends the rules for obtaining a waiver from the requirement to send biennial statements to unlocated former and retired members. Previously, in order to obtain the waiver there must have been reasonable and probable grounds to believe that the former or retired member is missing. Under the new rules, FSRA may waive the notice requirement if it is satisfied that the pension plan administrator is unable to locate the individual after having made reasonable efforts to do so. In making its decision, FRSA is required to consider: (1) the amount or commuted value of the pension; (2) the searches that were undertaken by the pension plan administrator, including the search methods that were used; and (3) the costs of the searches that were undertaken and the anticipated costs for additional searches.
The deemed consent provisions of Bill 132 and the provisions dealing with the requirements pertaining to missing members came into effect upon the bill receiving royal assent.
Family law changes
Bill 132 sets out rules for calculation of the imputed value of pension benefits where assets have been transferred out of the pension plan on or after the family law valuation date. It also sets out rules for transfers of divided pensions from successor pension plans and provides additional rule-making powers to FSRA. The family law changes introduced in Bill 132 will come into force upon proclamation.
The introduction of deemed consent to electronic communications promises to ease the transition towards using electronic means to communicate with Ontario pension plan members and expand the use of electronic communication in the pension sector. It remains to be seen whether FSRA will use its rule-making authority to make additional rules concerning the use of electronic communications.