OSFI review of pension investments – Update

In the previous Issue 24 of InfoPensions, we provided an overview of work being carried out by OSFI and its Private Pension Plans Division (PPPD) to review how we supervise defined benefit pension plan investments. Among the areas for improvement we identified is the need for additional OSFI guidance intended to promote more robust investment risk management practices among the pension plans OSFI regulates. We are committed to keeping you informed of key developments relating to this important initiative.

Since our last update in May 2021, work has been ongoing to develop a discussion paper that proposes a set of principles-based regulatory expectations relating to risk management for pension plan investments. A key consideration for OSFI has been ensuring that pension plans of all sizes, investment complexity and risk profiles are able to apply and adapt these proposed regulatory expectations commensurate with their circumstances and experience. The intention of selecting the discussion paper format is to solicit feedback from plan administrators and other pension industry stakeholders regarding the implementation by pension plans of the proposed regulatory expectations set out in the discussion paper.

The discussion paper is expected to be published in early 2022 (in lieu of a late autumn 2021 timeframe that we have previously communicated). A consultation period will follow, during which plan administrators and other pension industry stakeholders are encouraged to review and comment on any aspect of the discussion paper. Feedback received will inform the development of guidance, which will first be released in draft form for comment prior to being finalized.