Pension Investment Disclosure for Large Plans

Summary#

These proposed regulations, the Regulations Amending the Pension Benefits Standards Regulations, 1985 (Publication of Information Relating to the Investments of Plans), would require the Office of the Superintendent of Financial Institutions (OSFI) to publish standardized information about where large federally regulated private pension plans invest their money. The rules would apply to plans with at least $500 million in assets and would ask OSFI to report investment breakdowns for the plan years 2022, 2023 and 2024.

What it does#

• Defines a “prescribed plan” as any federally regulated private pension plan with total assets of $500 million or more at the end of its plan year.
• Requires OSFI to publish, for each prescribed plan:
  • the market value (dollars) and share (percentage) of assets invested in each geographic location; and
  • the breakdown of those assets by asset class within each geographic location.
• Lists the geographic locations to be reported:
  • Canada, United States, Europe, China, Asia‑Pacific region (excluding China), Latin America, and any other location.
• Lists the asset classes to be reported:
  • public equities, private equities, bonds, infrastructure, real estate, short‑term assets (cash, deposits, guaranteed investment certificates and short‑term securities), and any other class.
• Requires the data to be shown separately for defined benefit and defined contribution portions, by employer for single‑employer plans and by plan name for multi‑employer plans, and also aggregated across all plans.
• Requires the first public release to include data for plan years ending in 2022, 2023 and 2024.
• The regulations come into force when section 184 of the Budget Implementation Act, 2024, No. 1 comes into force (or on registration if that is later).

Who's affected#

• Large federally regulated private pension plans — specifically about 50 plans that are expected to meet the $500 million threshold. These plans represent roughly 89% of federally regulated pension plan assets.
• The 1,180 federally regulated pension plans in total (with combined assets of about $238 billion) could be affected indirectly, but the disclosure requirement is aimed at the larger plans.
• Plan administrators, who will need to provide the more detailed investment breakdowns to OSFI. That may involve actuaries or investment managers preparing reports.
• Plan members and retirees of those large plans, who will be the primary audience for the published information.
• Provincial governments and regulators may notice the change, since most pension plans in Canada (93%) are provincially regulated and the federal move could encourage similar provincial disclosures.

Why it matters#

• It makes it easier for plan members and the public to see where their pension money is invested by giving a consistent, comparable breakdown by country/region and by asset type.
• That transparency can help people understand exposure to certain countries or asset types (for example, how much is invested in China or in private equity).
• The government says the additional reporting should have minimal costs because much of the information already exists in plan records. OSFI will publish the data and cover implementation costs within its existing resources.
• The rules apply only to large federally regulated private plans. Most private pension plans in Canada are provincially regulated or too small to be covered, so many plans will not be included.