Ontario: New policies on missing plan beneficiaries
On September 30, 2017, the Financial Services Commission of Ontario (“FSCO”) issued two new policies related to missing beneficiaries: Policy A300‑900: Searching for Plan Beneficiaries (the “Search Policy”) and Policy A300-901 (the “Waiver Policy”). The Search Policy sets out steps a pension plan administrator should consider when searching for plan beneficiaries. The Waiver Policy sets out FSCO’s requirements for granting a waiver from the requirement to provide statements to missing former members and retired members.
The Search Policy
Section 22 of the Pension Benefits Act (the “PBA”) imposes a standard of care on plan administrators. According to the Search Policy, this duty includes the obligation to maintain accurate and current member records, including contact information.
The Search Policy states that:
- prudent administrators should establish processes and procedures to update member records in order to provide information and notifications required under the PBA and Regulations;
- a number of methods may be used, individually or in combination, to search for current addresses or other contact information;
- administrators should choose search methods in the context of their particular pension plan. Factors for consideration include the following:
- nature and location of the employer;
- plan’s size and demographics;
- magnitude of the pension and/or commuted value entitlements;
- cost of the search; and
- likely effectiveness of the approach;
- administrators should document the date(s) and the type of methods used to search for an individual’s current contact information;
- termination and retirement packages should include a statement about the importance of keeping the administrator informed of any future changes to their contact information, and administrators should follow up immediately when mail is returned.
The Waiver Policy
The Waiver Policy sets out FSCO’s requirements to grant administrators a waiver from the requirement to provide statements to missing former members and retired members. The PBA and Regulations require that the biennial statements be sent to the last known address of a former member or retired member, unless FSCO provides a waiver of this requirement.
- Before submitting a waiver application, the administrator must ensure an individual-directed search has been undertaken for all individuals who are part of the waiver application. The Search Policy provides guidance on the search process.
- The application for a waiver must:
- include a description of the search conducted for each missing member;
- identify the party that conducted the search (e.g. employer, third-party administrator, professional search company); and
- identify the date(s) the search was conducted.
- If FSCO considers a waiver application incomplete and/or non-compliant with the Waiver Policy, they will advise the applicant in writing, specifying the period within which the applicant must provide a written response. The applicant then has the opportunity to provide additional information and/or comply with the Waiver Policy.
- If the application is acceptable, FSCO will send a letter to the applicant granting the waiver. The applicant must keep a record of the application and supporting documents indefinitely.
- If the application is not acceptable, the applicant will be advised by letter of the Superintendent’s decision not to grant the waiver. The Superintendent’s decision cannot be appealed to the Financial Services Tribunal.
- FSCO will publish information concerning the waiver application on its website in accordance with the policy on disclosure by the Superintendent of decisions made under the PBA.
- Each waiver application approved by the Superintendent is applicable to a specific biennial statement, and not to all biennial statements required to be distributed in the future.
- If the administrator cannot send a required biennial statement, a separate waiver application must be made each time, but the administrator is not required to conduct another individual-based search for each missing member for whom a waiver was previously granted.
The Search and Waiver Policies provide a comprehensive scheme by which administrators can exempt themselves from the requirement to provide biennial statements to the last known address of missing former and retired members. Additionally, the Search Policy provides good general guidance for administrators in searching for missing former and retired members and keeping current contact information for such persons.