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© Copyright 2000 Rogers Media. The following article first appeared in the July 2001 edition of
BENEFITS CANADA magazine.
Questioning CAPSA
A Vancouver consultant says CAPSA lacks authority and accountability. He's got a tough case to
make.
By Dian Cohen
Earlier this year, the canadian association of Pension Supervisory Authorities (CAPSA), along with the
Joint Forum of Financial Market Regulators, began publishing a set of discussion papers on various aspects
of pension regulation. In putting out these documents, the inter-jurisdictional body whose sole raison
d'être is "to facilitate an efficient and effective pension regulatory system in Canada," called for
review and comment from any and all stakeholders.
Greg Hurst, manager of the Pension Division at Heath Benefits Consulting in Vancouver, is giving them their
money's worth and more besides. Hurst fired off a scathing letter to CAPSA, and copied benefits canada and
the Association of Canadian Pension Management (ACPM) in April.
Hurst's letter was aimed not at the content of the publications themselves, but "the current murkiness
regarding CAPSA's accountability and authority for the development of regulatory initiatives." CAPSA, wrote
Hurst, "is not accountable to any elected official . . . there currently exists no regulatory framework for
the promulgation and adoption of national guidelines." Furthermore, Hurst asked, "we know who CAPSA is and
what their professed mandate is, but where does this mandate come from? To whom is CAPSA accountable?"
Tough questions. But not too tough for Sherallyn Miller, British Columbia's Superintendent of Pensions, and
CAPSA chair. "There's nothing murky about our accountability and authority at all," she tells me. "We are
accountable to our respective governments. We don't make legislation, the elected officials do. CAPSA
cannot, and does not do anything in public without consulting all the governments that we represent. They
haven't as yet backed the [most recent] principles we've put forward, but they like and support the process
by which we discover what we can all live with. Whatever comes out of CAPSA comes out of consensus."
Hurst has other complaints, namely that "there are no checks and balances [on CAPSA] of a proper public
process of policy implementation. The pension industry and plan sponsors should challenge CAPSA to
establish their regulatory credentials before we accept any policy initiatives from them."
Miller replies, "Our job is one of consultation in the interests of harmonization of pension laws. We have
always consulted widely with industry, but until a couple of years ago, what we weren't doing well was
consulting with each other. Since then, we've agreed to become more proactive in regard to policy
development. Certainly, elected representatives turn to their professional pension practitioners for
suggestions about making pension law work better--but in the end, they, the politicians, make the final
decisions."
Hurst even takes issue with the regulators' goal of harmonization. "I'm not convinced that . . . is such a
good thing," he says. "The regulators are pretty good at making public policy--in many respects they're
ahead of industry in innovating. Harmonization will get in the way of that."
Miller, as well as Gretchen Van Riesen, chair of advocacy and government relations for ACPM both argue
vigorously that harmonization is essential to the health of the pension system.
They're right. Nothing stifles growth faster than five or six feet of regulation. An industry spokesperson
estimates that for every dollar governments spend making regulations, industry spends $20 trying to comply.
Greg Hurst's issues are less than compelling. More than that, his letter is ill timed. CAPSA has shown
itself, thus far at least, to be committed to industry consultation. That has come across clearly in its
handling of the Proposed Regulatory Principles for Capital Accumulation Plans--the Joint Forum of Financial
Market Regulators is accepting industry responses up until the end of this month.
To question CAPSA's modus operandi at this critical juncture in the development of pension regulation is
not helpful. There is too much to gain from a more co-operative approach.
Dian Cohen is an economics consultant with a special interest in pension issues.
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