After the introduction of the Harmonized Sales Tax (HST) on July 1st in Ontario and British Columbia, both investment management fees (IMFs) and monthly per member fees may have HST applied to them, according to a Proteus ‘Pension Update.’

The HST on IMFs will have the effect of further decreasing the fund’s unit value, as fund companies will calculate the amount of HST to apply dependent on either the province of registration for the plan sponsor or a blended rate depending on the provincial distribution of members.

The Financial Services Commission of Ontario (FSCO) has issued a new policy on document retention for pension plans. According to Proteus, the Policy (Index No. A300-200) allows plan sponsors to examine whether their current document retention policy sufficiently protects both the administrator and the plan’s beneficiaries.

According to FSCO, documents relating to pension plans will typically fall into one of the following three categories:

• plan records that pertain to legislated requirements;
• plan records that pertain to individual plan beneficiaries and payment of their pension entitlements; and
• all other plan records that pertain to the day-to-day operation of the pension plan and pension fund.

For legislatively required documents the policy notes that “neither the PBA nor the Regulation limit the retention period of the (legislatively required) plan records. The records must always be made available to those who are eligible to inspect the records under section 29 of the PBA. Records pertaining to individuals’ entitlements should be retained as long as they have an entitlement under the pension plan.” The policy also notes that once a member is paid out in full, the administrator should maintain a summary of the payment details for future reference.

The HST is now in effect in Ontario, British Columbia, New Brunswick, Nova Scotia, and Newfoundland and Labrador.

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