Ontario Regulation 387/24 made under the Pension Benefits Act Made: October 10, 2024 Filed: October 16, 2024 Published on e-Laws: October 16, 2024 Published in The Ontario Gazette: November 2, 2024 Written policies under section 10 of the Act CONTENTS 1. Application 2. Interpretation 3. Scope of information 4. Funding and benefits policy 5. Governance policy 6. Communications policy 7. Filing requirements 8. Review of policies 9. Commencement   Application 1. This Regulation applies with respect to pension plans that provide target benefits. Interpretation 2. (1) In this Regulation, “General Regulation” means Regulation 909 of the Revised Regulations of Ontario, 1990 (General) made under the Act; (“règlement général”) “Target Benefits Regulation” means 386/24 (Target Benefits) made under the Act. (“règlement sur les prestations cibles”) (2) Expressions in this Regulation have the same meaning as in the General Regulation, unless the context requires otherwise. Scope of information 3. In the case of a pension plan that provides target benefits and defined contribution benefits, the plan’s funding and benefits policy, its governance policy and its communications policy are only required to contain information relating to the part of the plan that provides target benefits. Funding and benefits policy 4. (1) The following information is prescribed as information to be contained in a pension plan’s funding and benefits policy: 1. The funding and benefits objectives for the pension plan as they relate to the following: i. The benefits provided under the plan and the stability of those benefits. ii. The stability of the contributions required to provide benefits under the plan. iii. The equitable treatment of members, former members and retired members, in the context of both the current and the future membership of the plan. 2. The process and metrics the administrator must use to assess the following: i. Whether the funding and benefits objectives mentioned in paragraph 1 are expected to be achieved over both the short and long term. ii. Whether changes to contributions or benefits are necessary. 3. The frequency of assessments mentioned in subparagraphs 2 i and ii and any circumstances that would require additional assessments. 4. The material risks relating to benefits provided under the plan that could result in reductions to accrued benefits, and the measures to be taken to quantify and manage those risks. 5. The method for determining the provision for adverse deviations, which must result in a percentage that is not less than zero. 6. How a provision for adverse deviations determined by applying the method mentioned in paragraph 5 and the actuarial methods and assumptions used to determine plan funding requirements, i. support the funding and benefits objectives mentioned in paragraph 1, and ii. mitigate the material risks mentioned in paragraph 4. 7. Any additional methods to be used to support the funding and benefits objectives mentioned in paragraph 1. 8. In circumstances where, as determined in accordance with subsection 10 (5) of the Target Benefits Regulation, contributions required under the plan are not sufficient to meet the plan’s funding requirements, the process for deciding how to reduce benefits provided under the plan, including accrued benefits. 9. The benefit reductions to be implemented within the time period specified in clause 10 (7) (b) of the Target Benefits Regulation if no other action has been taken that will result in the plan meeting the funding requirements under section 10 of that Regulation within that time period. 10. The circumstances in which benefit improvements could be made, including whether previously reduced benefits would be restored before additional benefit improvements could be made and, if so, how the benefits would be restored. 11. The circumstances, if any, in which plan assets in excess of liabilities may be used such that the value of “B” in the formula set out in subsection 10 (5) of the Target Benefits Regulation is greater than zero, to offset contribution requirements in respect of the normal cost of the plan and the amount equal to the provision for adverse deviations in respect of the normal cost of the plan. 12. An explanation of how use of plan assets in excess of liabilities in the circumstances mentioned in paragraph 11 is supported by the funding and benefits objectives mentioned in paragraph 1 and is consistent with the measures to be taken to quantify and manage the material risks mentioned in paragraph 4. 13. The circumstances, other than those mentioned in section 8, that would require the funding and benefits policy to be reviewed. 14. The circumstances that would require the funding and benefits policy to be amended. (2) The administrator of a pension plan shall provide a copy of the funding and benefits policy to the actuary preparing a report or actuarial cost certificate required in respect of the plan under section 3, 13 or 14 of the General Regulation. (3) The administrator shall provide the copy of the funding and benefits policy to the actuary on or before the later of, (a) 60 days after the policy is filed or amended; and (b) the day the actuary is engaged to prepare the report or actuarial cost certificate. Governance policy 5. The following information is prescribed as information to be contained in a pension plan’s governance policy: 1. The roles, responsibilities and reporting relationships of the persons involved in the administration of the pension plan or pension fund. 2. The operational policies in place to support the administration of the pension plan or pension fund, including any applicable organizational structures. 3. The skills, knowledge, experience and other attributes required of each person or class of persons involved in the administration of the pension plan or pension fund. 4. The processes to verify that ongoing training of the persons involved in the administration of the pension plan or pension fund occurs to ensure those persons are able to meet their obligations. 5. The measures in place to monitor, review and assess the skills, knowledge and performance of the persons involved in the administration of the pension plan or pension fund. 6. The processes in place to determine what changes to the administration of the pension plan or amendments to the plan may be appropriate based on the results of the stress testing required to be included in a report or based on the use of any other relevant analysis. 7. The processes in place to ensure that persons involved in the administration of the pension plan or pension fund have access to relevant, timely and accurate information. 8. The code of conduct established for persons involved in the administration of the pension plan or pension fund, including the process for identifying, disclosing, monitoring and addressing conflicts of interest. Communications policy 6. The following information is prescribed as information to be contained in a pension plan’s communications policy: 1. The main objectives for communication strategies with, and outreach to, members, former members, retired members and other persons entitled to benefits under the plan. 2. The communication processes and the methods of communication that must be used to communicate with members, former members, retired members, other persons entitled to benefits under the plan, participating employers, trade unions and associations. 3. An explanation of how plan demographics are taken into consideration when determining the communication processes and methods identified in paragraph 2. 4. Other than prescribed information, any information regarding the plan that must be included in statements to members, former members, retired members and other persons entitled to benefits under the plan to help them understand that accrued benefits may be reduced. 5. The measures that must be taken by the administrator to evaluate whether the communications meet the objectives mentioned in paragraph 1. 6. The course of action that must be taken by the administrator to assess how communications can be improved if the communications do not meet the objectives mentioned in paragraph 1. Filing requirements 7. (1) For the purposes of subsections 10 (6) and (7) of the Act, a pension plan’s funding and benefits policy, its governance policy and its communications policy must be filed within one year after the effective date of the conversion of benefits of the plan to target benefits. (2) For greater certainty, documents filed for the purposes of subsection 10 (6) or (7) of the Act are plan amendments for the purposes of subsection 12 (1) of the Act. (3) For greater certainty, any amendment to a funding and benefits policy, governance policy or communications policy is a plan amendment for the purposes of subsection 12 (1) of the Act. Review of policies 8. (1) The administrator of a pension plan shall periodically conduct a review of the plan’s funding and benefits policy, its governance policy and its communications policy. (2) The first review of a policy under subsection (1) shall be completed within three years after the day the applicable policy is filed. (3) Each subsequent review shall be completed within three years after the day the previous review was completed. (4) At the request of the Chief Executive Officer, the administrator shall provide the Chief Executive Officer with evidence that the plan’s funding and benefits policy, its governance policy or its communications policy has been reviewed in accordance with subsections (1) to (3). Commencement 9. This Regulation comes into force on the later of the day section 17 of Schedule 33 to the Stronger, Fairer Ontario Act (Budget Measures), 2017 comes into force and the day this Regulation is filed.   Français