Targeted Review: Member Option Statements – Termination and Retirement

Pension plan administrators must provide option statements to all members when they terminate employment or retire from the plan.

 

Receiving complete and accurate termination and retirement statements within stipulated timelines is critical for members to help them make informed decisions. It also ensures their payments can be processed in a timely manner.

 

The legislation prescribes:

 

  • The information that must be included in these statements;
  • Deadlines by which administrators must provide the statements; and
  • The timeframe for payment of the pension benefit once the member informs the plan administrator of their election.

FSCO is launching a targeted review of member option statements in March 2018 to focus on whether plan administrators are:

 

  • Meeting legislated requirements for statement content and prescribed timelines; and
  • Calculating commuted values in accordance with pension plan provisions.

The requested data is for Ontario members only who were active members up to their date of termination or retirement.

 

More information

 

Frequently Asked Questions: Targeted Review: Member Option Statements

 

Q1. I received an email from FSCO asking for information related to member option statements. What does this mean?

 

A1.  FSCO is conducting a targeted review related to member option statements to ensure compliance with the Pension Benefits Act (PBA) and FSCO policies, and to protect the interests of pension stakeholders by promoting best practices. You received an email because your plan has been selected to be part of the review.  

 

Q2. How long do I have to respond to this request from FSCO?

 

A2. You have 30 days from the date of the email to respond to this request from FSCO. This timeline is noted in the email itself. FSCO may contact you before the 30 days to ensure a response is forthcoming.

 

Q3. What are Member Options Statements?

 

A3. Pension plan administrators must provide a member option statement to members who have terminated employment (or plan membership in the case of a multi-employer pension plan) or who are retiring. It must be provided within 30 days after a member has terminated employment. The administrator must also provide a retirement option statement 60 days prior to a member’s normal retirement date, or the date they have advised they intend to retire. Statements must include, among other information:

 

  • details about the pension benefits payable to the member;
  • options available to the member; and
  • deadlines within which the member must choose an option.

Section 41(1) of Regulation 909 (the Regulation) lists all the information that must be included in the termination statement. Section 44(1) of the Regulation lists all the information that must be included in the retirement statement.

 

Death/survivor benefit statements described in section 43 of the Regulation are not in scope for this targeted review.

 

Q4. The email states that we should provide copies of related correspondence. What does this mean?

 

A4.  Related correspondence refers to all documentation in addition to the termination or retirement statement provided to and received from the member. Examples of related correspondence include: 

 

  • letters or emails sent by the member or the administrator in connection with the member’s termination or retirement;
  • completed forms (such as T2151) used to transfer the member’s commuted value or account balance out of the pension plan; and
  • other completed forms, checklists or waivers used by the plan administrator.

Q5. For defined benefit plans, why does FSCO need a copy of the member’s most recent annual statement?

 

A5.  The most recent annual statement will contain information up to the year ending prior to the termination statement being provided to the member. The annual statement is a key document that the member uses in making an informed decision about their pension. 

 

Q6.Should personal member information be removed from the documentation?

 

A6.  The member’s name, social insurance number, and banking information should be removed or redacted from the documentation. If you have additional questions concerning the removal of personal information, please contact the FSCO staff member indicated at the bottom of the email.

 
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