The Office of the Superintendent of Financial Institutions Canada (OSFI) has released a policy advisory to provide further detail on its expectations with respect to consent benefits.
The policy advisory clarifies OSFI’s stance on benefits that are subject to a plan administrator’s consent, such as early retirement benefits. According to the document, OSFI has found that documentation for some plans may state that a benefit is subject to consent, whereas, in practice, the administrator does not actually have discretion to grant or deny the benefit.
The advisory goes on to outline that plans should have documented procedures for administering consent benefits. These procedures should:
- demonstrate that the administrator has discretion to grant or deny consent;
- describe the administrator’s considerations when exercising its discretion; and
- demonstrate that the administrator’s considerations are consistent with its fiduciary role.
The advisory document offers the reminder that, “Administrators have a responsibility to ensure all promised benefits that are to be paid from the pension fund are clearly identified and described in the plan text.”
Read the full text of the policy advisory here.