The Financial Services Regulatory Authority of Ontario is issuing leading practices for the province’s defined benefit multi-employer pension plans, in the areas of governance, risk management and communication.

In the area of governance, these practices include establishing a comprehensive orientation policy to onboard new trustees to ensure they begin their term prepared to carry out their duty. The guidance also advised these plans to implement education policies to support trustees in fulfilling their role as plan fiduciaries, including a regular assessment of skills needed for the administration of the plan, as well as in-house, plan-specific education.

Read: CRA pension bulletin shouldn’t apply to MEPPs, JSPPs, says ACPM

In addition, DB MEPPs should consider a trustee succession plan, as well as plan enrolment policies and procedures that support members remaining connected with their pensions and an investment policy that considers industry-leading practices relevant to how the plan assets will be invested.

The guidance also advised plans to establish a risk-management policy that integrates funding and benefit policies and outlines the material risks facing the pension plan, along with a plan to either mitigate or respond to these risks. This could include the use of asset and liability studies and stress testing to assess the plan’s ability to withstand and recover from adverse experience and the related impact on benefit levels.

And the guidance said DB MEPPs should ensure regular, ongoing dialogue between trustees, advisors and key stakeholders, while using plain language to communicate with plan beneficiaries to ensure they make informed decisions.

Read: An update on MEPPS, JSPPs and PRPPs