With the introduction of Bill 132 in the Ontario legislature last week, pension plan sponsors should be aware of a number of amendments coming to the Pension Benefits Act.
If passed, the changes will affect sections of the act that cover electronic communications, missing plan members and the conversion of single-employer pensions into a jointly sponsored plan.
To further facilitate electronic communication, the amendments will require that plan members consent to receiving certain documents sent by the administrator electronically, provided certain conditions are met, including that documents are sent in another written form at any time.
In terms of missing plan members, where the act currently requires plan administrators to provide former and retired members with written statements, amendments will permit the Financial Services Regulatory Authority of Ontario’s chief executive officer to waive that requirement if they’re satisfied there are “reasonable and probable grounds to believe the former member or retired member is missing.”
However, the changes also set out factors that the CEO is required to consider in determining whether the plan administration made reasonable efforts to locate missing members. And, where the administrator receives the contact information of a missing member, they will be required to immediately notify the CEO.
In terms of converting single-employer plans to jointly sponsored pensions, a plan sponsor may request the CEO’s consent to a transfer of assets before the jointly sponsored plan is registered under the act. “However, if the application for registration of the jointly sponsored plan is not received by the chief executive officer within 90 days after the application for consent is made, the application for consent is deemed not to have been made,” the bill states.
As for how spouses, including former spouses, obtain a statement of imputed value, the act will be amended to provide the FSRA “with additional rule-making authority respecting certain aspects of a lump-sum transfer or division of a pension.”
In terms of the administrator of a pension plan, the bill will add a new clause providing that, where the plan is a single-employer jointly sponsored pension, the administrator “may be a board of trustees or any person, body or entity referred to in other specified clauses of the subsection.”