Ontario Pension Advisory Committees – Get Ready to Vote


The fun never stops for sponsors of Registered Pension Plans in Ontario… fresh off dealing with filing their Statements of Investment Policies and Procedures, addressing Environmental Social and Governance factors, preparing to distribute member statements to retired and deferred vested members, plan sponsors now need to be ready to setup a Pension Advisory Committee (PAC) if their employees or union ask.

The new rules come into effect on January 1, 2017 and apply to registered pension plans in Ontario (DB or DC, doesn’t matter) with at least 50 active and retired members (deferred vested members don’t count for this purpose).  If 10 or more active or retired members, or a union representing 10 or more members, request a PAC then a vote must be conducted within 90 days.  If the majority of plan members vote by secret ballot to establish a PAC, then one must be setup promptly.  If the vote fails, then there is no requirement to hold another vote for three years.

The PAC must have between 4 and 15 members, with at least 2 active and 2 retired members.  The plan sponsor/administrator is not represented on the committee.

The purpose of the PAC, according to the Act, is to:

(a) to monitor the administration of the pension plan;

(b) to make recommendations to the administrator respecting the administration of the pension plan; and,

(c) to promote awareness and understanding of the pension plan on the part of members, former members, retired members and other beneficiaries.

The plan sponsor/administrator also has the following duties with respect to the PAC:

(a) to meet with the committee at least twice per year, unless the PAC only requests annual meetings;

(b) to arrange for the plan actuary to meet with the PAC at least annually, in the case of a plan that provides defined benefits;

(c) to ensure that the PAC has access, at least annually, to an individual who can report on the fund’s investments;

(d) to provide reasonable administrative assistance for the advisory committee to prepare and distribute an annual report about its activities to members, former members, retired members and other beneficiaries; and,

(e) to provide the committee with the opportunity to examine the records of the administrator in respect of the administration of the pension plan and the pension fund; however, this does not include access to private member data.

Reasonable costs related to conducting the vote to establish at PAC as well as reasonable costs related to the PAC’s establishment and annual operation are payable out of the pension fund.

So yes, you read that right, if your pension plan is big enough and the majority of members say “yes” (why wouldn’t they?), you must establish a Pension Advisory Committee, arrange for annual meetings with the actuary and investment advisers, and pay for all of this from the pension fund.  While the PAC doesn’t have any direct authority or power over the pension plan, it certainly has the chance to be an onerous and expensive proposition for the plan sponsor, and it’s not obvious to me if there will be any tangible benefits for the plan members.



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