The Financial Services Regulatory Authority of Ontario (FSRA) recently released draft Proposed Guidance on Pension Plan Amendments for consultation. The guidance seeks to provide clarity regarding the following:
- Effective Date of Amendments: Previously, FSRA has allowed effective dates of amendments to be earlier than the filing date with FSRA. The guidance seeks to update the guideline for amendments that change the benefits and/or contributions of the plan. The change would require plan sponsors to file the amendment with FSRA before the effective date.
- Replacing a Variable Indexation Formula with a Fixed Indexation Rate (for accrued benefits): Previously, FSRA allowed for changes from variable indexation to fixed indexation rates provided the change was favourable. The guidance would update to disallow these amendments as they have the potential to reduce the benefits payable to plan members.
- Notice Requirements for Adverse Amendments Under Section 26(1): Previously, FSRA had guidelines related to required notices for members regarding adverse changes to a plan. These rules provided a notice exemption for housekeeping or technical amendments. The guidance would propose that plan sponsors seek exemption for notice requirements by written approval from FSRA.