Office of the Superintendent of Financial Institutions
The Office of the Superintendent of Financial Institutions (OSFI) has issued this Instruction Guide to inform the pension industry of OSFI’s expectations with respect to asset transfers related to defined contribution provisions from federally regulated pension plans and the filing requirements related to transfers involving individuals whose pension benefits are subject to provincial pension legislation.
An asset transfer occurs when all or any part of the assets of a pension plan are transferred to another pension plan. For asset transfers related to defined contribution provisions that pertain to members in included employmentFootnote 1, administrators do not need to obtain the federal Superintendent’s permission, provided that the transfer is not to a pooled registered pension planFootnote 2. Although permission is not required in this case, OSFI expects to be notified of such a transfer and expects administrators to ensure that the rights and interests of the affected individuals are preserved.
If, however, the transfer includes assets of individuals whose pension benefits are subject to provincial pension legislation, then, in most cases, permission from the federal Superintendent is required because most provincial pension legislation requires the approval of the relevant supervisory authority.
This Instruction Guide does not apply to asset transfers related to defined benefit provisionsFootnote 3.
OSFI has developed a standardized
Approval Request Form for Asset Transfers related to Defined Contribution Provisions of Pension Plans (Asset Transfer Request Form). This form should be submitted when permission to transfer assets is required.
If there is a discrepancy between the Instruction Guide and the
Pension Benefits Standards Act, 1985 (PBSA) or the
Pension Benefits Standards Regulations, 1985 (PBSR), the legislation prevails. When reviewing requests for permission to transfer assets, OSFI may consider factors or require documentation not mentioned in this Instruction Guide.
An asset transfer occurs when all or any part of the assets of a pension plan (the “transferring plan”) are transferred to another pension plan (the “receiving plan”). This can occur between pension plans with different employers and between pension plans established for the same employer.
An asset transfer from a pension plan can occur for a number of reasons including a sale or other transfer of business, a merger or amalgamation as part of a business rearrangement of pension plans or as a result of a transfer of individuals between plans.
The following scenarios are not considered asset transfers and therefore do not require the Superintendent's permission:
Unless the assets are being transferred to a pooled registered pension planFootnote 2, administrators do not need to obtain the federal Superintendent’s permission to transfer assets related to defined contribution provisions if that transfer only pertains to transferring members in included employmentFootnote 1. In this case, OSFI still expects administrators to ensure that the rights and interests of the individuals affected by such transfers are preserved.
Prior to transferring these assets, OSFI expects the administrator of the transferring plan to ensure the following:
Some plans cover employees in both included employment and employees who are subject to provincial legislation. These plans are known as multi-jurisdictional pension plans (MJPPs).
On July 1, 2020, the federal government, together with the governments of British Columbia, Alberta, Saskatchewan, Ontario, Quebec, New Brunswick and Nova Scotia, signed the
2020 Agreement Respecting MJPPs (the 2020 Agreement). The 2020 Agreement delegates responsibility for regulatory approvals from the minor authorities of a MJPP to the major authority of a MJPP. This means that the major authority is responsible for approving these transactions, including asset transfers, on behalf of any minor authority that requires approval under their provincial pension legislation. Generally, the major authority is the pension regulator of the jurisdiction with the plurality of active members in the plan. If the plurality of active members is in included employment, the major authority would be OSFI and the plan would be registered federally.
With the exception of SaskatchewanFootnote 5, all of the provinces that are signatories to the 2020 Agreement require approval of the relevant supervisory authority for asset transfers related to defined contribution provisions. Accordingly, the administrator of a pension plan for which OSFI is the major authority must obtain the federal Superintendent’s permission prior to transferring assets related to defined contribution provisions from a federally registered pension plan if the transfer involves individuals whose pension benefits are subject to the pension legislation of one or more of the signatories of the 2020 Agreement.
Before July 1, 2020, bilateral agreements were in effect between the federal government and most provinces. Since the government of Manitoba is not a signatory to the 2020 Agreement, the bilateral agreement between the federal government and Manitoba remains in effect and operates in the same way as the 2020 Agreement with respect to asset transfers related to defined contribution provisions.
Newfoundland and Labrador did not sign the 2020 Agreement and the federal government does not have a bilateral agreement with that province.Footnote 6 There is no provincial pension legislation in force in Prince Edward Island (PEI). Therefore, the federal Superintendent’s permission is
not required to transfer assets related to defined contribution provisions with respect to individuals whose benefits fall under the jurisdiction of Newfoundland and Labrador or PEI.Footnote 7 It should be noted however that if any of the transferring individuals’ benefits are subject to the pension legislation of Newfoundland and Labrador, the administrator will have to obtain permission from the Superintendent of Pensions in that province for this type of asset transfer.
Where the Superintendent’s permission to transfer defined contribution assets is required, administrators must complete the Asset Transfer Request Form. The Asset Transfer Request Form, and other relevant supporting documents (for example, the transferring plan amendment, the receiving plan amendment or plan text as applicable) must be filed using the Regulatory Reporting System (RRS). Please refer to the
Instruction Guide for: Filing an Application of an Asset Transfer related to Defined Contribution Provisions (Provincial Plan Members Only) using RRS for further instructions.
When completing section 6 of the Asset Transfer Request Form, the province of the transferring individuals that are not in included employment must reflect their jurisdiction in the transferring plan, even if their jurisdiction changes in the receiving planFootnote 8. Administrators are expected to ensure that the asset transfer complies with all applicable provincial pension legislation and regulations, including applicable notice, filing, and timing requirements.
If the transferring plan is also registered in Newfoundland and Labrador and any transferring individual’s pension benefits are subject to the pension legislation of Newfoundland and Labrador, a separate request for permission to transfer assets related to these individuals will need to be filed with the Newfoundland and Labrador regulatory authority.
Subsection 10.2(2) of the PBSA provides that the transfer of pension plan assets to a pooled registered pension plan (PRPP) requires the Superintendent’s permission. Prior to transferring any assets relating to defined contribution provisions to a PRPP, administrators must contact OSFI for information on how to obtain the Superintendent’s permission.
Regardless of whether permission from OSFI is required for the defined contribution asset transfer, following a transfer of assets, OSFI expects the administrator of a transferring plan to notify OSFI in writing of the following:
After the effective date of an asset transfer, the transferring individuals’ pension benefits accrue under the receiving plan. It is important that plan terms reflect this and that contributions for transferring individuals for accruals after the effective date be remitted to the receiving plan.
If all the assets of a defined contribution pension plan are being transferred to another pension plan, the administrator of the transferring plan must continue to file annual information returns, certified financial statements (and, if required, auditor’s reports) and pay annual assessments until all of the plan’s assets have been transferred.
The transferring plan’s registration will be considered vacated and no further filings or assessments will be due once OSFI receives written confirmation from the administrator of the transferring plan that no assets remain in the pension fund. A year-to-date financial statement from the custodian of the transferring plan should accompany this confirmation.
Subsection 4(4) of the PBSA defines included employment.
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See section 3.3 of this Instruction Guide for further details.
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With respect to the transfer of assets related to defined benefits from a federally regulated pension plan to another pension plan, please see OSFI’s Instruction Guide on
Asset Transfers related to Defined Benefit Provisions of Pension Plans.
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In the case of a custodial change, the new trust agreement or insurance contract must be filed with OSFI.
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Saskatchewan’s pension legislation does not include specific requirements with regards to approving asset transfers; however, it does include the requirement to obtain approval from the Superintendent of Pensions in Saskatchewan for any amendments made to the plan. Under the 2020 Agreement, the provisions of the pension legislation of the major authority’s jurisdiction govern with respect to amendments and OSFI does not register or approve amendments. As a result, for asset transfers involving individuals subject to Saskatchewan’s pension legislation only, OSFI’s approval is not required.
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Dual registration is required for plans with members in both included employment and members subject to Newfoundland and Labrador’s pension legislation.
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Provided that the transfer is not to a pooled registered pension plan. See section 3.3 of this Instruction Guide.
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In some cases, the transferring members’ jurisdiction changes because of the underlying transaction (e.g., change in employment because of a sale of business).
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