iAtoday

On September 9, the Canadian Association of Pension Supervisory Authorities (CAPSA) released the final versions of Guideline No. 3, Capital Accumulation Plans, about which we communicated last October, and Guideline No. 10, Risk Management for Plan Administrators.

Guideline 10 is intended for administrators of defined benefit and defined contribution pension plans, group registered plans, target benefit plans and hybrid plans. It delineates the key elements of a robust risk management framework that plan administrators must adopt to identify, assess, manage and monitor the significant risks to which the plan is exposed. The risks it addresses are specific and include:

• Use of third parties
• Cyber security
• Investment risk management practices
• Environmental, social and governance (ESG) issues
• Use of leverage

Implementation

We encourage plan administrators to review this guideline now to inform their risk management framework and comply with the new rules.

While CAPSA believes that pension plan administrators should have been able to implement the new requirements as of September 9, 2024, CAPSA recognizes that the implementation of a risk management framework may vary from plan to plan, and that plan administrators must consider the nature of the risks specific to the plan, as well as its complexity. However, if technological or administrative changes are required, they can be implemented up to January 1, 2026.

CAPSA reiterates that it may examine the measures put in place by plan administrators to assess whether they are fulfilling their obligations.