Disclosure of information to plan members and former members

Annual statements for members and former members

As announced in InfoPensions 15, a number of amendments to the Pension Benefits Standards Regulations, 1985 (PBSR) came into force on July 1, 2016. These amendments include a new requirement to send annual statements to former members (including retirees) and new disclosure requirements for annual statements to members. All annual statements that are due to be issued after July 1, 2016 must comply with the new disclosure rules.

Plan administrators can refer to the instruction guides titled Disclosure Requirements for Defined Contribution Pension Plan (DC Disclosure Guide) and Disclosure Requirements for Defined Benefit Pension Plans for more information. 

OSFI has received enquiries about which annual written statement should be sent if a recipient was an active member at the plan year end but a former member at the time the statements are mailed out. We have communicated that, based on the requirements of the PBSR, administrators should determine the type of annual statement that should be provided based on the recipient’s status at the end of that plan year.

Plan administrators are also reminded that annual member statements must accurately reflect the benefits that are payable to that member. If, for example, a member’s benefits have been adjusted as a result of credit splitting following the breakdown of a marriage or common-law partnership, this adjustment should be reflected in the member’s accrued pension benefit amount shown in the annual statement.

Defined contribution plans – new disclosure requirements

Member choice

If assets of the plan are held in respect of member choice accounts, members are entitled to receive annual statements that include a description of each investment option available to them, how their funds are currently invested and any timing requirements that apply in making an investment choice. The details of what must be included can be found in subsection 7.3(1) of the PBSR and Appendix A of the DC Disclosure Guide.

Variable benefits

Plan administrators of defined contribution plans paying variable benefits to former members are reminded that the annual statements provided to these former members must include additional information as set out in paragraph 23(1.1)(i) of the PBSR and Appendix B of the DC Disclosure Guide.

Plan amendments – determining which parties should receive notice

Subparagraph 28(1)(a)(i) of the Pension Benefits Standards Act, 1985 states, in part, that a pension plan must provide, to each member and employee who is eligible to join the plan and that person’s spouse or common law partner, a written explanation of any applicable amendment, within 60 days after the amendment is made.

Individuals who may be affected by the plan amendment and who should therefore receive a written explanation of that amendment are those who were either members of the plan or eligible to join the plan when the amendment was made. The spouses or common law partners of these individuals should also receive a written explanation of the applicable amendment.

In order to ensure that new members or new employees eligible to join the plan receive up-to-date information on the plan, any amendments made before these individuals became members or became eligible to join the plan should be included in the information package provided to them.