Pension Fees (November 2011)
Information
Amendments to section 23 of the Office of the Superintendent of Financial Institutions Act (OSFI Act) were included in Part 8 of Bill C-47 and will come into force on a date to be fixed by order of the Governor in Council. This section of the OSFI Act was amended to move the annual assessment of pension plans from the PBSA to the OSFI Act. Related draft regulations were published in the Canada Gazette Part I on October 1, 2011, with a 30-day public comment period. The proposed regulations support the move of the assessment authority from the PBSA to the OSFI Act, as well as make adjustments to the assessment formula with the objective of providing a better alignment between plans’ assessments and the cost incurred by OSFI in connection with administering the PBSA.
Some of the key adjustments to the assessment formula proposed in the draft regulations are as follows:
- All plan beneficiaries are included in the plan assessment base. The current formula captures only active members.
- There is a minimum plan assessment base of 50 plan beneficiaries. The current formula has a minimum plan fee base of 20 members.
As a result, OSFI expects the minimum annual assessment will increase from $440 in 2010-2011 to approximately $600, and the maximum annual assessment will increase from $220,000 to approximately $240,000
The total value of assessments charged to federal pension plans will not increase as a result of the changes proposed in the draft regulations. Rather, these proposed changes would have the effect of adjusting the relative amounts that pension plans pay in order to better align those amounts with the effort undertaken by OSFI. As a result, some plans may experience an increase in their assessment while others may experience a decrease.
Plan assessments for plan year ends between October 1, 2011 and September 30, 2012
The proposed regulations set out the formula used to calculate plan assessments effective April 1, 2012. The current pension plan fee schedule posted on the OSFI website contains a fee rate for plan year ending between October 1, 2011 and September 30, 2012. It is expected, however, that a new fee rate will be prescribed under the proposed pension assessment regulations and will apply to plan year ends between October 1, 2011 and September 30, 2012. Once prescribed, this new fee rate would replace the current fee rate posted on the OSFI website. OSFI will continue to communicate further information on this matter. Questions and/or comments may be directed to information@osfi-bsif.gc.ca.