The federal pension regulator, the Office of the Superintendent of Financial Institutions (OSFI) has announced actions to address issues stemming from COVID-19 faced by federally registered pension plans. As we outlined in our previous Client Update, the Impact of COVID-19 on Pension Plans, regulators in Ontario and elsewhere are actively monitoring the financial environment, considering and making the necessary modifications. OSFI is doing so by making adjustments to its policies to protect the interests of pension plan members and beneficiaries and to allow administrators of federally regulated private pension plans to focus their efforts on addressing other challenges presented by the COVID-19 crisis, including its impact on financial markets. Freeze on Portability Transfers Plan administrators are no longer permitted to grant portability transfers or annuity purchases related to defined benefit provisions of pension plans. Absent plan specific or special circumstances, the Superintendent will not consent to any such transfer or purchase, given that financial market conditions have negatively affected the funded status of pension plans. The freeze is intended to protect the benefits of plan members and beneficiaries. The payment of ongoing pensions is not impacted by this change. Extension of Filing Deadlines OSFI is extending the deadlines for certain actions and annual filing requirements, including those under the Pension Benefits Standards Act (Canada). OSFI has extended the prescribed deadline from six months to nine months following plan year-end for the following filings:
Annual Information Return and related documents
Certified Financial Statement
Auditor’s Report Filing Confirmation
Actuarial Report and Actuarial Information Summary
Annual statements to members and former members and spouses
In respect of the Annual Information Return, OSFI will issue an invoice for the annual assessment after the extended deadline. Suspension of Policy Development OSFI has suspended the following consultation initiatives and policy development work related to new or revised guidance until conditions stabilize:
Instruction Guide for the Preparation of Actuarial Reports for Defined Benefit Pension Plans
Instruction Guide for the Termination of a Defined Benefit Pension Plan
Instruction Guide for Authorization of Amendments Reducing Benefits in Defined Benefit Pension Plans
Further Information For any questions or for further information concerning any of the topics discussed in this Update, please contact any members of the Pensions, Benefits and Compensation Group.
This Update is intended as a general summary for educational purposes only and should not be relied upon as legal advice with respect to any particular set of circumstances. If you require advice as to your circumstances, please contact any member of our Pensions, Benefits and Compensation Group.