Ontario’s Financial Services Regulatory Authority (“FSRA”) recently posted new Guidance entitled “Pension Plan Administrator Roles and Responsibilities”. This is an “Interpretation” level of Guidance which means it sets out FSRA’s view of legislative and regulatory requirements and is an indication of their expectations around compliance for Ontario-registered pension plans.
The Guidance sets out a summary of legislative provisions that affect who or what can be an administrator and what they should do. It helpfully lists out the main tasks of an Administrator (providing information to beneficiaries, paying pensions, keeping records, etc.), and the other guidance that applies to various elements of administration (developed by both FSRA and the umbrella organization for all pension regulators in Canada, the Canadian Association of Pension Supervisory Authorities known as CAPSA). There are substantial sections on the fiduciary duties of an Administrator and service providers.
FSRA points out that the legislative standard which requires an Administrator to act with the care, diligence and skill appropriate when dealing with “the property of another person” is a higher standard than a fiduciary is held to at common law. This is an important context of the administration of a pension plan. The Guidance goes on to point to an Administrator’s development of policies and procedures, as well as proof that they are followed, as key to demonstrating that the Administrator is acting according to its duties. It goes on to connect these duties to funding and issues that arise in financial distress.
The Guidance reviews the double layer of duties related to service providers – both the Administrator’s duty to supervise and consider how to properly rely on service providers and the fiduciary duty on the service providers that they cannot avoid through contractual terms.
This blog provides some of the highlights of the Guidance, not a full review. If you wish to discuss the Guidance and its implications for a particular plan, please contact one of Cavalluzzo's experienced pension lawyers, listed below.