The Financial Services Regulatory Authority is seeking stakeholder input on draft guidance on providing consent for asset transfer transactions under the Pension Benefits Act.
Aiming to support predictability and transparency for defined benefit plan administrators, sponsors and members and to protect of the rights of members, the guidance sets out how the FSRA will exercise its discretion and may provide its consent for the purposes of an asset transfer transaction under the act.
As an example, a transaction may occur when two businesses merge or one organization acquires another and their individual pension plans are to be partially or fully merged. It could also happen if a single employer pension plan merges into a jointly sponsored pension plan.
“Regardless of the underlying reason for the asset transfer transaction, this approach guidance supports pension plan administrators’ understanding of how to seek FSRA’s consent to the transfer and when and how FSRA will exercise its discretion.”
In a press release, the regulator noted the guidance aims to protect DB plan member and beneficiary entitlements; to speed up the review process that examines whether original and successor plans will remain able to deliver on their long-term pension promises; to keep members properly informed of the impact of asset transfers on their past and future benefits; and to make plan management more efficient overall for plan sponsors and administrators.
The consultation period will run from Sept. 11 to Nov. 30, 2020.