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©Copyright 2000 Rogers Media. The following article first appeared in the August 2001 edition of
BENEFITS CANADA magazine.
EDITORIAL
Good news
If Dina Palozzi's views on DC plan regulation are in the mainstream, there is hope for plan
sponsors.
By Kevin Press
Dina Palozzi, former chief executive officer and superintendent of financial
services at the Financial Services Commission of Ontario and former chair of the Joint Forum of
Financial Market Regulators, agrees with two key industry criticisms regarding the body's Proposed
Regulatory Principles for Capital Accumulation Plans. Her comments, made last month in an interview
with benefits canada, signal the possibility that the regulators will act on industry input.
First, Palozzi believes it appropriate that defined contribution (DC) plan
sponsors be given a clear set of minimum standards. These standards would, if followed
correctly, protect them against the potential for future legal action by plan members.
"I think that's legitimate feedback," she says. "The regulators will have to
address that. I think we'll need to respond and provide that."
Second, Palozzi agrees there should be a way for regulators to recognize the
responsibilities of plan members in a DC plan. "We are in the business of regulating pension
plan sponsors, administrators and employers. But that doesn't mean that as regulators we can't
articulate a level of expectation--that in the context of these things there is an obligation
that the member also has."
These important comments come as the influential Palozzi exits her long-time
regulator role. As we reported last month, she is now executive vice-president, client
relations at BMO Nesbitt Burns in Toronto.
This all bodes well for DC plan sponsors and industry providers worried about
what next steps might come from the Joint Forum. Now that the deadline for industry comment on
the first proposed principles has passed, we can take comfort in the fact that a regulator
(albeit a former one) as prominent as Palozzi is taking such a progressive, open-minded view of
the points raised during the consultation process.
The question of course is, do Palozzi's comments represent mainstream opinion
among the various pension, insurance and securities regulators?
There is reason to believe they do. Several key players--Sherallyn Miller,
chair of the Joint Forum's Working Committee on Capital Accumulation Plans is a good
example--have shown themselves to be cooperative, responsive and genuinely committed to working
with industry stakeholders on the development of the best possible DC plan regulatory
system.
We're not through all of this yet. But it's looking an awful lot better than
it did the day the Proposed Regulatory Principles for Capital Accumulation Plans report
landed.
Kevin Press - kpress@rmpublishing.com
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