On June 4, 2024, the Financial Services Regulatory Authority (FSRA) of Ontario released their final guidance regarding retroactive adverse amendments. In the guidance, FSRA is prohibiting pension plan administrators from registering retroactive adverse amendments that could negatively affect plan members or beneficiaries, such as changes to contribution rates, with some exceptions.

The new guidance is aimed at addressing amendments that negatively affect the rights or entitlements of plan members or apply an effective date that occurs prior to the filing date with FSRA.

FSRA’s updated guidance focuses on retroactive amendments, including those made to correct drafting errors, replace variable indexation formulas with fixed rates (accrued benefits) and comply with notice requirements for prospective adverse amendments.

The guidance also clarifies how the regulator will interpret and enforce provisions in the Pension Benefits Act (PBA) regarding retroactive plan amendments.  In some instances, an amendment may be considered to have a retroactive impact on rights and benefits of members, however the amendment may not truly have an ‘adverse effect’.  FSRA will assess each case individually, considering the specific circumstances and aligning it with the PBA’s statutory objectives.

To read FSRA’s full guidance, click here.