The Association of Canadian Pension Management is cautioning the Office of the Superintendent of Financial Institutions on a one-size-fits-all approach to risk management across the diverse sectors regulated by the OSFI.
In an open letter responding to a consultation by the OSFI, Ric Marrero, chief executive officer of the ACPM, said such an approach has the potential to not accurately — nor fully reflect — the many differences between banks, insurance companies and pension plans, noting each of these sectors are subject to very different legal and legislative regimes, structures and frameworks, legal duties, standard of care and focus.
“Given this background, generally, a single policy framework for all wouldn’t be appropriate, unless it fully appreciates and clearly reflects the very different regulatory needs and structure of each area,” he wrote, adding comprehensive policies would likely be unwieldy and not user-friendly for institutions seeking to comply with the guidance.
For most pension plans, noted Marrero, the examination of risk at an enterprise level would encompass not only the plan but the sponsoring organization as well, which the OSFI doesn’t typically have regulatory jurisdiction over.
By pursuing separate policies and guidance by sector, he said the OSFI can better ensure the many differences between the areas it regulates are respected and properly reflected in its policies and guidance.
“This would also better ensure better adherence to such policies and guidance as it would enable the entities in each of [the] OSFI’s areas of regulatory oversight to more easily access and act on the policies and guidance applicable to them.”