Following the study noted below, the Financial Services Commission of Ontario (FSCO) decided to exempt designated pension plans from the requirement to file the Investment Information Summary (IIS) form, a form approved by the Superintendent of Financial Services for use in FSCO’s risk-based pension investment monitoring program.

Designated pension plans, as defined under section 8515 of the Regulations under the Income Tax Act (Canada), are a special subset of defined benefit pension plans that are normally set up for connected persons and/or other highly compensated employees.  Since the inception of the risk-based pension investment monitoring program in 2006, FSCO has considered exempting designated plans from the annual IIS filing on account of their special nature and lower risk.  The pension investment monitoring experience of the past two years allowed FSCO to further study the differences between designated and non-designated plans within the program’s framework.  Based on a comparative analysis of various options, the study suggests that exempting designated plans from the annual IIS filing would be the most practical and favourable option.

To improve the effectiveness and efficiency of the risk-based monitoring of pension investments, FSCO has exempted designated plans from the annual IIS filing.  For any fiscal year ending on or after December 31, 2007, designated plans are no longer required to file the IIS form with FSCO.  Notwithstanding this exemption, designated plans registered with FSCO must comply with all the requirements set out in the Pension Benefits Act and Regulation 909, including the federal investment regulations and the filing of financial statements.  Designated plans may wish to continue their use of the IIS form as a tool to help ensure compliance.

FSCO’s risk-based monitoring of pension investments is a useful program.  Exempting designated plans from the annual IIS filing streamlines the pension investment monitoring process and makes the risk-based monitoring program more effective and efficient.