Administering a pension plan involves the accumulation of large amounts of data in the form of documents, filings, reports, emails and letters.
At some point, plan administrators who have amassed all this information will ask themselves, “How long do we need to keep these records?” There’s some guidance from pension legislation, as well as pension regulators, on retention periods of plan records. Saskatchewan, Manitoba, New Brunswick and Nova Scotia have legislation that sets out retention periods for certain plan records. In other provinces, retention periods for plan records are less clear.
Guidance from pension regulators in British Columbia, Alberta and Ontario remind administrators of their fiduciary obligations to administer a pension in accordance with applicable pension legislation and plan documents. In order to meet these fiduciary obligations, plan records should be retained. Pension plans have long time horizons and, as a result, retention periods of plan documents can be lengthy.
Ontario’s Pension Benefits Act outlines prescribed documents and information that administrators are to make available for inspection upon request. These include current and prior plan texts and plan amendments, any documents relating to the current and previous plans that must be filed with the Financial Services Regulatory Authority of Ontario relating to the registration of the plan or amendment, copies of any information returns, financial statements, actuarial reports and statement of investment policies and procedures filed with the FSRA and copies of correspondence related to the plan between the administrator and the FSRA going back five years from the date of request.
While the PBA doesn’t prescribe any retention period, the FSRA’s perspective is that these prescribed documents need to be retained by administrators indefinitely in order to meet the legislative requirement of making certain information available for inspection.
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Records retention periods aren’t prescribed in the B.C. and Alberta pension legislation. Guidance from pension regulators in these provinces indicate plan records should be retained for as long as the record may have applicability to the plan or to an individual entitled to plan benefits.
For records related to members, former members and others who are entitled to benefits, these records should be retained for as long as the individual has entitlement under the pension plan. These would include, annual statements, retirement statements or documents related to a choice made by the individual.
According to B.C., Alberta and Ontario pension regulators, it’s acceptable to eliminate individual records related to a former member where they’ve been paid their full benefit. Administrators can instead maintain a summary of that former member’s entitlement, including any final payout. In creating this summary, administrators should record enough individual information in order to answer future questions about that individual’s entitlement.
Administrators often engage third-party service providers and should be aware their legislative obligations around records retention apply to any plan records retained by third-party providers.
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What about other plan records related to the day-to-day operation of the plan, such as pension committee meeting minutes, investment manager reports and monthly invoices related to trust chargeable expenses?
These are documents that don’t relate to any individual and they aren’t filed with a pension regulator. In some provinces, they aren’t addressed in legislation.
Where there’s no guidance in legislation, administrators should keep these types of documents for as long as needed to demonstrate they’ve met their fiduciary duties. The importance of meeting minutes was apparent in Larkin v. Johnson, where the B.C. Court of Appeal dismissed claims against the trustees for breach of fiduciary duty relating to decisions the trustees had made. The court reviewed documentation of the decision-making process set out in the minutes before dismissing the claim.
Some legal claims may not arise until after an individual receives their benefit entitlement, which may be years later. Where legislation provides little or no guidance around the retention of records related to the day-to-date operation of the plan could be, it may be practical to consider the likelihood of a claim where that particular document would be evidence.
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