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Trends in Canadian
pension regulation and
supervision
Susan Bird, May 10, 2017
Montreal, Quebec
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Regulatory environment
Federal Income Tax Act
Federal Pension Benefit
Standards Act
Pension
regulation
Provincial pension
benefits acts
Trends in Canadian pension regulation and supervision
Montreal May 10, 2017
Other regulation (privacy,
workers compensation,
human rights)
2
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Trends in Federal Pension
regulation and supervision

Consideration of target benefit plans

Failure to recognize role of bargaining agents

Consideration of making target benefits available to
single employers

Some acknowledgement that current solvency funding
regime is not working
Trends in Canadian pension regulation and supervision
Montreal May 10, 2017
3
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Trends in provincial pension
regulation

Regulators accepting target benefit plans for multi
employer plans

The largest regulator (Ontario) is behind – no legislation
yet – not a leader in this area

Some provinces have introduced shared risk/target
benefits
Trends in Canadian pension regulation and supervision
Montreal May 10, 2017
4
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Trends in provincial pension
regulation

As expected as part of the introduction of target benefits,
regulators have introduced regulation that plans must

Have written governance policies

Have written governance compliance reviews

Have written funding and benefits policies
Trends in Canadian pension regulation and supervision
Montreal May 10, 2017
5
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6
Trends in provincial regulation

Some synchronicity of regulations between provinces on:

Vesting

Funding – gradual move to target/shared risk

Governance policies

Still a long way to go
Trends in Canadian pension regulation and supervision
Montreal May 10, 2017
6
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Trends in pension supervision
(provincial)

Progressive regulators move to risk based supervision

Risks:

Funding

Investment

Operational

Governance

Industry
Trends in Canadian pension regulation and supervision
Montreal May 10, 2017
Provincial
risk based
assessment
Key items
7
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Trends in pension supervision
(federal)
Administration
Communications to
members
Significant
activities
Asset management
Trends in Canadian pension regulation and supervision
Montreal May 10, 2017
Actuarial
8
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Risk indicators
Annual filings
Financial statements
Risk
indicators
Actuarial reports
Trends in Canadian pension regulation and supervision
Montreal May 10, 2017
Plan amendments
9
Trends in pension supervision:
supervisory process
Ongoing monitoring and
review
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In depth review
Trends in Canadian pension regulation and supervision
Montreal May 10, 2017
intervention
10
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Federal pension supervision
Identify
risk
Identify
controls
Trends in Canadian pension regulation and supervision
Montreal May 10, 2017
Identify
oversight
= Overall
Net Risk
11
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Federal risk based supervision
Overall
net risk
+ solvency
Trends in Canadian pension regulation and supervision
Montreal May 10, 2017
+ funding
=
Composite
risk rating
(CRR)
12
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Tools for supervision
Freezing
portability
Additional
scenario
testing
Meet with
regulator
Direct
compliance
Additional
disclosure to
members
Remove the
administrator
Early
valuation
Plan
examination
Trends in Canadian pension regulation and supervision
Montreal May 10, 2017
Bring an
action
against
administrator
Revoke
registration
Tool
box
Terminate
the plan
13