Correcting Administrative Errors

Occasionally, OSFI receives questions about administrative errors that have occurred in respect of the administration of a pension fund. We would like to remind plan administrators that our policy, as communicated in PBSA Update – Issue 27, has not changed. OSFI does not approve or provide advice on actions to correct an administrative error.

OSFI considers an administrative error to be an unintentional act or omission on the part of the administrator or their agent, such as, the transfer of funds into a wrong account or an incorrect amount entered on the remittance cheque. Special payments that were made according to the last filed actuarial report that are found to be higher than what would be required based on a subsequently filed actuarial report are not considered to have been made in error. We would also not consider contributions remitted in excess of minimum funding requirements resulting from adherence to administrative processes adopted by the administrator or their delegate(s) to be an administrative error.

OSFI expects plan administrators and custodians to have the proper governance structure in place to deal with administrative errors. OSFI does not play a role in correcting administrative errors or in authorizing the actions taken to correct them. OSFI does however, expect custodians or plan administrators to inform OSFI in writing of the actions taken to correct the error. This provides OSFI with a record of the error and the action(s) taken.

Please note that on plan termination, subsection 29(7) of the Pension Benefit Standards Act, 1985, requires that if a plan has been terminated then no part of the plan assets can revert to the employer without the consent of the Superintendent and provision has to be made to pay all benefits up to the date of termination. This means that if a plan administrator has become aware of an administrative error after the plan has already terminated, they would not be able to correct the administrative error without the consent of the Superintendent and all benefits have to be paid.