Ontario: FSRA sets pension priorities and service standards
The Financial Services Regulatory Authority of Ontario (FSRA) has issued two draft documents providing insight into its regulation of the pension sector in Ontario. The first document sets out FSRA’s service standards for pension plan regulation and the second sets out FSRA’s priorities for the next fiscal year.
FSRA releases draft service standards
On September 24, 2020, FSRA released a guidance document, Approach No. GR0009APP, which sets out its proposed service standards for evaluating its performance against measurable expectations and targets.
Three service standards apply directly to pension plan regulation, while several enterprise-wide standards affect pensions, as well. FSRA says its service standards were created based on principles of internal and external accountability, efficiency, consistency, actionability and transparency. The service standards applicable to pension plans are reproduced below.
Commencing October 1, 2020, FSRA will collect data on its performance in respect of each standard relative to its target, and report its performance on a quarterly basis.
FSRA accepted comments on the proposed service standards guidance until October 23, 2020.
FSRA sets pension priorities for upcoming fiscal year
On October 13, 2020, FSRA published a draft Proposed FY2021-2022 Statement of Priorities document, describing its priorities for the coming year. FSRA continues to emphasize its aims of burden reduction and improving regulatory effectiveness across sectors.
With respect to the pension industry, FSRA has identified three priorities on which to focus in the coming year:
- Support plan flexibility, evolution and principlesbased applications within the existing regulatory and legislative regime;
- Develop and consult on a prudential supervision framework; and
- Refocus pension regulation to improve regulatory efficiency and effectiveness.
These priorities will see FSRA undertake a number of new initiatives.
- Towards the end of the 2021-2022 fiscal year, FSRA plans to engage the pension sector through a specialized Technical Advisory Committee on member communication and engagement strategies with the goal of achieving better outcomes for members.
- Building on the previous year’s priorities, FSRA will continue to develop its prudential framework. In an effort to promote the long-term viability and financial sustainability of the Pension Benefit Guarantee Fund (PBGF), FSRA will add stochastic modeling to its predictive analysis and supplement the expertise of its risk analytics team.
- As chair of the CAPSA leverage committee, FSRA will also develop a leverage risk governance framework.
- FSRA will continue to focus its resources on large plans and “high-value” regulatory activities.
- The Technical Advisory Committees set up over the previous fiscal year will continue to operate, including the committee on defined contribution pension plans (set up jointly with the Office of the Superintendent of Financial Institutions) and committee on the pension division resulting from marriage breakdowns. FSRA advises that the latter will result in the production of a plain-language guide for plan members, and may lead to the publication of a new rule on family law matters.
Comments were accepted until November 3, 2020.