In an effort to provide further guidance to administrators of defined contribution (DC) pension plans, the Canadian Association of Pension Supervisory Authorities (CAPSA) has released a draft “Defined Contribution Pension Plans Guideline” (the Guideline) for comment. The Guideline is intended to supplement existing CAPSA guidelines (i.e., Guideline No. 3 – Capital Accumulation Plans, Guideline No. 4 – Pension Plan Governance, Guideline No. 5 – Fund Holder Arrangements, and Guideline No. 6 – Pension Plan Prudent Investment Practices) by:
- clarifying rights and responsibilities of those who administer/sponsor DC plans, third-party service providers and plan members;
- providing additional guidance regarding the information to be given to DC plan members, including information regarding investment choices, contributions, projected account balances at retirement, retirement products available to members (e.g., locked-in retirement accounts, locked-in retirement income funds and life income funds) and variable benefits (where permitted by legislation); and
- considering examples of what may constitute an adverse amendment for a DC plan and the related disclosure requirements.
The Guideline also provides checklists of the information DC plan administrators should provide to members regarding the various retirement products. Comments on the Guideline are due by November 1, 2012.