The National Institute on Ageing is addressing the issue of missing pension plan members, in a new report highlighting the challenges faced by plan administrators and individuals entitled to unclaimed pension benefits.
The report provides a framework for decision-making and emphasizes the importance of collaborative efforts from all sectors — government agencies, plan sponsors, financial institutions, third-party administrators and other stakeholders — to develop effective solutions that serve everyone.
Read: New federal legislation around missing pension plan members should include ongoing plans: ACPM
According to a 2023 report by the Ontario Financial Services Regulatory Authority, for plans registered in Ontario alone, nearly 200,000 pension plan members were considered missing, leaving behind $3.6 billion in unclaimed entitlements.
Multi-employer pension plans made up 53 per cent of missing plan members and 26 per cent of missing entitlements, while jointly sponsored pension plans made up 24 per cent of missing members and 29 per cent of missing entitlements. Single employer pension plans made up 23 per cent of missing members and 45 per cent of missing entitlements.
According to a separate report by Sun Life Financial Inc., there were 6,730 missing Sun Life annuitants under group annuity policies purchased by pension plans as of March 2022. Nearly two-thirds (63.1 per cent) of the missing members were male, reflecting the labour force participation rates of the past and, perhaps, a degree of gender inequality in access to pension plans.
Read: How employers can help track down Ontario’s 175,000 missing pension plan members
Looking at different generations, the largest group of missing members were those born prior to 1946 (57.1 per cent), followed by baby boomers (35.5 per cent) and generation X (6.6 per cent). Nearly three-quarters of missing annuitants had an annual pension of $5,000 per year or less.
“Addressing the problem of missing pension plan members is a clear win for everyone,” said Alyssa Brierley, executive director of the NIA, in a press release. “Individuals are reunited with their rightful funds, plan administrators can clear legacy issues, and governments benefit from tax revenue when these funds are distributed. This report offers a foundation for engaging all the stakeholders in developing a collaborative solution.”
Read: FSRA issues final guidance on missing pension plan members