Your information on the COVID-19 pandemic


COVID-19 | All the information needed for understanding total rewards in the context of the COVID-19 pandemic.

contact us remun

May 2020

Ontario Registered Pension Plans: Limitations on Transfers and Actuarial Valuation Disclosures

On May 22, 2020, the Financial Services Regulatory Authority of Ontario (FSRA) published a guidance outlining its approach for reviewing applications to transfer commuted values or to purchase annuities when a pension plan’s transfer ratio (TR) has declined since the most recently filed valuation report by at least 10% and is now below 90%. In addition, FSRA also updated the Q&A initially released on April 24, 2020, in response to the COVID-19 pandemic, addressing various issues for pension plan administrators, sponsors and members, among which for actuarial valuations.


As mentioned in our April 2020 bulletin, if a plan administrator knows or ought to know that the TR has dropped by more than 10% (or below 90% for plans with a TR greater than 1) since the most recently determined TR, the administrator shall not transfer any part of the value of pension benefits to which members or former members are entitled without FSRA’s prior approval.

Administrators must seek FSRA’s approval by submitting Form 10 before resuming transfer payments. FSRA will determine whether the request will be reviewed under either an expedited or in-depth process as described below:

  • Under the expedited process, approval can be expected within five business days if:
    • The plan’s updated TR is at least 85% and the aggregate of all transfer deficiencies since the last valuation date does not exceed 5% of the plan’s assets at that time; or
    • The employer commits to making additional “top-up” contributions corresponding to the entire transfer deficiency with respect to each commuted value (CV) transfer; or
    • The updated TR is less than 85% and the administrator proposes to only transfer out according to the updated TR, with the remainder having to be transferred out within five years of the initial transfer.

If either one of the first two situations is approved, 100% of benefit entitlements can be transferred. Should the third situation apply, biennial statements to former members will have to be produced until the remaining balance of the CV is settled.

  • Under the in-depth review process, FSRA may deny approval or approve CVs to be settled at 100% or less. FSRA encourages administrators to provide additional information that supports the plan and sponsor’s financial security, which can be found in its guidance note. FSRA has indicated that it will strive to respond to the applicant within 15 to 20 business days under this process.

The administrator may also decide that the best course of action until plan stability has improved is to refrain from seeking approval to continue CV transfers in the short term for concerns such as benefit security or liquidity. Administrators should obtain legal and actuarial advice before making this decision and notify FSRA immediately if taking this approach.

An administrator who has either decided to suspend CV transfers or received FSRA’s approval to transfer CVs only at the updated TR can generally resume transferring 100% of the CV if certain conditions are met.

Finally, if a plan administrator received FSRA’s approval to resume transfers of CVs and knows or ought to know that the TR has declined by an additional 5% since the most recently determined TR, it must cease CV transfers and seek FSRA’s approval to resume transfers again.

As for buy-out annuity purchases, plan sponsors must contribute any deficiency (based on the updated transfer ratio) before the purchase can be made.


FSRA expects pension plans filing an actuarial valuation as at December 31, 2019, or any valuation date before the impact of the COVID-19 pandemic to disclose the market and economic downturn of 2020 as a subsequent event.

In addition, following new disclosures required by the Canadian Institute of Actuaries, FSRA expects actuaries to disclose the impact on the funded status, TR and required contributions of various plausible adverse scenarios, which may include a market shock similar to the market decline experienced in 2020.

Furthermore, pension plan sponsors may consider filing an off-cycle valuation report (a valuation report with an effective date before the next required valuation date). While FSRA does not usually provide for off-cycle filing extensions, off-cycle valuations performed as at December 31, 2019, will be eligible to obtain a 60-day filing extension following the September 30, 2020 due date.

Normandin Beaudry consultants will continue to monitor Ontario pension sector news and developments with FSRA’s activities and will keep you informed. Feel free to contact us if you have any questions.