Office of the Superintendent of Financial Institutions
In a defined contribution plan, the employer and employee contribute a set or defined amount and the amount of pension income that the member receives upon retirement is determined by, among other things, the amount of contributions accumulated and the investment income earned. These contributions are often a fixed percentage of an employee's annual earnings and are deposited monthly in an individual account in the member's name. Investment earnings are credited to this account. Defined contribution plans may also be called money purchase plans.
Policy Advisories include descriptions of how the Office of the Superintendent of Financial Institutions (OSFI) has applied certain provisions of the Pension Benefits Standards Act, 1985 (PBSA), its Regulations and directives in force at the relevant time.
Policy Advisories may be based on specific circumstances pertaining to a particular transaction or type of transaction and are not binding on OSFI's consideration of subsequent transactions that may raise other circumstances or considerations. Plan administrators should obtain appropriate legal and actuarial advice on how the legislation, directives and guidelines affect their pension plan.
Questions or comments regarding these Policy Advisories may be directed to the Private Pension Plans Division at OSFI.