The Office of the Superintendent of Financial Institutions (OSFI) has issued a draft guideline that sets out disclosure obligations for defined contribution (DC) pension plans.
In a letter sent on Sept. 4, 2009 to DC plan administrators, OSFI explains that the guideline is intended to inform the pension industry “of the general principles as well as more detailed requirements” that OSFI will expect to be disclosed to plan members, eligible employees and spouses.
The general principles call for plan administrators to ensure that disclosure is timely, understandable, accurate, complete and useful, and that it is carried out in adherence with fiduciary responsibilities and duties of care.
Issues addressed in the letter include:
• member booklets, which should include a description of the plan, eligibility issues, contribution information, investment options, plan expenses and termination of the plan;
• investment information and decision making tools;
• expenses, fees and penalties;
• annual statements to members;
• plan amendments; and
• termination/retirement statements.
OSFI explains that effective communication between pension plans and their members promotes transparency and provides other benefits, such as enabling members to make informed financial planning decisions; helping them understand the plan and promote confidence in the plan.
Comments on the draft are due by Dec, 31, 2009. A copy of the letter can be found here.
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