When the Ontario government released a regulatory proposal to eliminate the so-called 30-per-cent rule on March 14, it appeared neither controversial nor significant at first blush. The rule prohibits an administrator from holding, directly or indirectly, securities to which are attached more than 30 per cent of the votes that may be cast to elect the directors […]
Pension plan administrators have a fiduciary duty to invest plan assets prudently and in the best interests of plan beneficiaries. This much, to quote Jane Austen, is a truth universally acknowledged. The rule is easy enough to state. It flows from a centuries-old principle of trust law that is elegant in its simplicity. Applying the […]
A recent Ontario Court of Appeal decision raises new cautions—and underscores existing ones—for administrators of registered pension plans with members employed or last employed in Ontario.
We are all familiar with the expression “the long arm of the law.” However, few laws’ arms are longer than that of the U.S. Foreign Account Tax Compliance Act (FATCA). Administrators of Canadian pension plans and financial institutions that hold or invest pension assets learned this last year when FACTA came into force on July 1, 2014.
Save your money, save the world? Pension funds, we are told, can be a force for social good, from promoting sustainable environmental practices, to punishing companies that cooperate with oppressive regimes, to improving the quality of corporate governance itself.
All too often, employers and plan administrators may sign an agreement without sufficient review and negotiation. Sometimes, they may enter into a service relationship without signing an agreement at all. While this may sound like the opening to a commercial (“Call your pension lawyer today!”), it remains a fact. The legal consequences for employers and administrators can be significant.
Member communications are the most difficult part of pension and benefits administration. A pension or benefits plan administrator has to condense complex legal, actuarial, investment and insurance concepts into candid, concise and digestible wording. In fact, pension plan administrators have a fiduciary duty—the highest duty known to law—to do so. While not as clear, health and welfare benefits plan administrators may have a similarly heightened duty, depending on the circumstances.
With the end of 2013 in sight, I can safely say “de-risking” is this year’s hottest pension buzzword. What, though, do I mean by de-risking, and how new is it really?
In my last article, I alluded to the story of the mythological princess Cassandra. Ontario’s new rules governing target benefit plans (TBPs) remind me of another mythological figure, the king Tantalus, whom the gods cursed to spend eternity standing in a pool of water underneath a fruit tree. Whenever Tantalus bent down to drink the […]
In Greek mythology, the god Apollo granted the princess Cassandra the ability to see the future. When she later rejected his advances, he cursed her so that no one would believe her prophecies. Her story segues nicely into the Canadian DC pension landscape of 2013. When pension lawyers warn about the legal risks of DC plans, we sometimes all feel like Cassandras.