New disclosure requirements for large federally regulated pension plans

On November 2, 2024, the federal government released draft amendments to the Pension Benefits Standards Regulations, 1985. The amendments, which are subject to a 30-day consultation period, will require large federally regulated pension plans to disclose the jurisdictions and asset classes in which they are invested.

What you need to know

• The new requirements will apply to federally regulated pension plans that have a total market value of at least $500 million.
• Under the proposed amendments, large federally regulated pension plans will have to disclose the market value (expressed in dollars and as a percentage of total assets) of the plan assets under management for each specified geographic location, and by asset class within each geographic location, at the end of the applicable plan year.
• The proposed amendments are subject to a 30-day consultation period, which ends on December 2, 2024. 

Background

In its 2023 Fall Economic Statement¹, the federal government announced its intention to require large federally regulated pension plans to disclose to the Superintendent of Financial Institutions (the Superintendent) the jurisdictions in which those pension plans are invested—which in turn, the Superintendent would disclose to the public.

In June 2024, Parliament approved Bill C-69, the Budget Implementation Act, 2024, No. 1, which included amendments to the Pension Benefits Standards Act, 1985 to enable the new disclosure requirements. These amendments are not yet in force but will become effective concurrently with amendments to the accompanying federal regulations, the Pension Benefits Standards Regulations, 1985 (PBSR), which contain details around the "prescribed information" that is to be disclosed and define which federally regulated plans will be subject to the disclosure requirements.

On November 2, 2024, the federal government released the anticipated draft amendments to the PBSR.

Which pension plans must disclose?

All federally regulated pension plans that have a total market value of assets of at least $500 million at the end of their plan year will be subject to the disclosure requirements. This threshold will impact approximately 50 plans and capture almost 90% of the $238 billion in assets held by federally regulated pension plans².

What information will be disclosed?

Under the proposed amendments, the Superintendent will be required to publish the market value (expressed in dollars and as a percentage of total assets) of the plan assets under management for each specified geographic location, and by asset class within each geographic location, at the end of the applicable plan year.

The proposed geographic locations are Canada, the United States, Europe, China, Asia-Pacific region (excluding China), Latin America, and “any other location”.

The proposed asset classes are public equity, private equity, bonds, infrastructure, real estate, short-term assets (including cash, deposits, guaranteed investment certificates, and short-term securities), and “any other class of assets”.

The information will be reported by the Superintendent separately for defined benefit provisions and defined contribution provisions by employer (or by plan name in the case of multi-employer pension plans). It will also be aggregated for all plans.

The proposed amendments will require the Superintendent’s initial publication of investment information to cover the 2022, 2023 and 2024 plan years.

Consultation period

The proposed amendments are subject to a 30-day consultation period, which expires on December 2, 2024. The proposed amendments will come into force on a day to be fixed by order of the Governor in Council.

Implications

The federal government’s stated purpose for these amendments, which was announced at the same time it expressed interest in encouraging pension plans to invest more in Canada, is to improve the transparency of the distribution of federally regulated pension plan investments to “help plan members and retirees to better understand where their pensions are being invested”. Large federally regulated pension plans can expect that if the amendments are enacted, they will be required to provide additional information about their investments when filing their annual returns, either in that return or in a new form.

As noted in the 2024 Federal Budget, the federal government intends to continue engaging with the provinces about requiring similar disclosures by Canada's largest provincially regulated pension plans. We will provide further updates on this matter as more information becomes available.