FSC­O Releases Final Records Retention Policy

By: Terra Klinck

The Financ­ial Services Commission of Ontario (“FSCO”) issued a records retention policy for pension plan administrators effective July 9, 2010. The policy is intended to provide guidance for "prudent records management and retention practices" relating to Ontario-registered pension plans. The policy was approved a­nd issued following the introduction of a draft policy last year and a public consultation period.

Among other things, the policy recommends that administrators establish a formal written records management and retention policy addressing the following matters:

• the types of documents that must be retained and their retention period;
• where the documents will be stored and in what form;
• how the documents can be accessed and by whom, including private and confidential records;
• the individuals (or positions) responsible for managing the documents and related training requirements;
• contractual agreements with service provider(s);
• the process for maintaining a back-up of the documents and for monitoring the documents; and
• the process for disposing of the documents at the end of their retention period, including private and confidential records.

The new policy is comprehensive and very detailed. It includes concrete recommendations regarding the maintenance of historical member-specific information. It also addresses fact-specific situations such as third party outsourcing arrangements and sale of business situations.

FSCO’s new records retention policy was approved just months after amendments to the Ontario Pension Benefits Act ("PBA") introduced the requirement that plan administrators retain "prescribed records" about a pension plan f­or the "prescribed period of time". This amendment to the PBA will be effective on a date proclaimed by the Lieutenant Governor. The "prescribed records" and "prescribed periods of time" referred to in the new PBA rules have not yet been introduced in the regulations. If and when new regulations are introduced, further records retention requirements will be imposed.

The introduction of these changes to the PBA­ and FSCO’s new policy are evidence that records retention is a priority item for FSCO. As such, plan administrators of Ontario registered plans should review their current practices to ensure compliance with the new policy and the new regulations, after they are introduced. While the policy is specific to Ontario and Ontario registered pension plans, it might well become viewed as the fiduciary standard of best practices, and used as a benchmark for plans registered in other jurisdictions.

For more information, please contact Terra Klinck at 416.864.7351 or your regular Hicks Morley lawyer.