Ontario adopted the Better for People, Smarter for Business Act, or Bill 132. It brings amendments to the Pension Benefits Act (PBA) and Pension Benefits Regulations (PRB). The amendments were effective December 10, 2019 (with the exception of changes to audited financial statements, which were effective December 11, 2019). The new legislation will have an impact on Ontario registered workplace retirement savings plans. It may also have an impact on plans who have members employed in Ontario. Here’s a summary of the key changes to the PBA/PBR following the introduction of Bill 132.

Electronic communications

Bill 132 now allows electronic communications to be the default method of documents delivery to plan members. Such documents include notices, statements, and other records. Previously, the PBA allowed the electronic delivery of documents to a plan member only if the plan administrator had received the member’s permission.

To enable this change, a letter must be sent to plan members informing them of the upcoming transition to electronic communications. The plan administrator has to provide additional information, such as:

  • the date on which the plan member will begin to receive documents electronically,
  • the plan member’s email address on file,
  • a statement informing the plan member that he/she may, at any time, elect to receive documents by mail instead of electronically, and
  • any other relevant information.

The plan administrator will also have to send a ‘reminder’ letter to plan members when they retire. The letter will remind retiring plan members that documents will continue to be delivered electronically. Just like for active plan members, the retired members can at any time elect to receive documents by mail instead of electronically.

At Sun Life, plan sponsors determine the default method of communication for their members. Once enrolled, plan members can decide what method best suits their needs. They can update their elections by choosing Paperless from their Account settings. That option is located at the top right of their home page. We’ll ensure that we’re communicating with plan members using their method of choice. The paperless option provides a better service experience and may reduce workplace plan expenses.

Audited financial statements

Pension regulations require certain plan sponsors to submit audited financial statements at the fiscal year-end of a pension plan. This requirement previously affected workplace plans with $3 million or more in assets (calculated at market value). The new amendments to PBR have increased this amount to $10 million.

Plan sponsors are responsible for filing their own audited financial statements with the pension regulator. Sun Life can assist the auditors (hired by the sponsors) in gathering the reports. However, the auditor usually works directly with the sponsor. This amendment represents a relaxation of regulatory requirements for workplace plans with less that $10 million in assets. It will result in decreasing the administrative workload for these plan sponsors.

Biennial statements for missing members

Following the adoption of Bill 132, the Chief Executive Officer (CEO) of the Financial Services Regulatory Authority (FSRA) of Ontario can now waive the requirement for a plan sponsor to re-apply for the waiver in respect of future biennial statements. To qualify, the plan administrator has to demonstrate that it has made reasonable efforts to locate the missing former member or retired member.

The FSRA will evaluate if the plan administrator has made reasonable efforts to locate a missing member. The FSRA will consider the following factors:

  • the value of the missing member’s account,
  • the search methods used by the plan administrator to locate the missing member, and
  • the costs related to these searches and any future searches.

The FSRA then grants a waiver. It applies until the plan administrator receives the contact information of the missing plan member. The FSRA revokes the waiver once the plan administrator confirms it has received the contact information of the missing plan member.

Sun Life has already put in place a rigorous process for locating missing former and retired members.

Do you need to take any action?

Sun Life remains committed in adapting to regulatory and legislative changes. We have processes in place to support these changes in a proactive and timely manner. This communication is for your information only. You don’t need to take any action at this time.

Questions?

Please contact your Sun Life Group Retirement Services representative.