The Plan complies with complex federal and provincial regulations and relies on participating employers to carry out certain administration functions. Our legal and pension administration experts ensure compliance as well as quality and efficiency in the calculation of benefits and delivery of service.
Registered pension plans such as the CAAT Plan follow federal and provincial legislation that governs pensions as set by the Income Tax Act (ITA) and the provincial Pension Benefits Act (PBA).
- Federal - The Canada Revenue Agency administers the Income Tax Act (ITA) and regulations, which set the maximum limits for Registered Pension Plans. The ITA provides for tax deductions for member and employer contributions in order to encourage Canadians to save for their retirement. It places restrictions on the amount of yearly earnings that Canadians can accumulate as tax-deferred pension income and the amount that can be transferred to other plans or to locked-in RRSPs.
- Provincial - The Financial Services Commission of Ontario (FSCO) regulates pension plans via the Pension Benefits Act (PBA). Unlike the ITA, which sets maximum limits, the PBA sets minimum standards for such requirements as vesting and eligibility. It spells out the rights of plan members and the obligations of Plan Sponsors in areas as diverse as disclosure of information and survivor benefits.
In order to carry out its fiduciary responsibilities, the CAAT Pension Plan's Board of Trustees turns to the specialized skills and advice offered by service providers and external consultants from the financial and pension industries.
The Plan has service providers to fill the roles of Actuary, Auditor, Investment managers, Custodian, Pension Payroll Agent and Legal Counsel. The performance of each provider is reviewed on a regular basis. The Plan also routinely tenders for new providers in order to ensure the highest possible value of service.
The role of the Actuary
Registered pension plans are required to file Actuarial Valuations with the Financial Services Commission of Ontario (FSCO) at least every three years. Valuations provide the regulators, and the Plan, with an analysis of the plan's financial condition. They must be prepared by an Actuary who is a Fellow of the Canadian Institute of Actuaries (CIA).
Preparing a valuation involves the collection of detailed data about the CAAT Pension Plan membership as well as the fund and investment returns. The Actuary produces the valuation using assumptions regarding future member mortality, investment returns, salary and inflation rates.
The role of the Auditor
Registered pension plans must file annual Audited Financial Statements with the Financial Services Commission of Ontario (FSCO). Audits are meant to ensure that FSCO receives documentation of the fund's financial condition.
Each year, the Plan completes the Financial Statements. These Statements must be examined by an external Auditor who is an accountant licensed to sign Audited Financial Statements and is a member of a public accounting body conducting an auditing practice. Once the Financial Statements have undergone the Auditor's assessment, they are reviewed by the Board of Trustees and filed with FSCO.
The role of the Custodian and Pension Payroll Agent
The main role of the pension plan's custodian is to receive the employer and employee contributions on behalf of the Plan. It maintains the invested assets, keeps the accounts for all investment activity and provides activity reports to the Plan’s Board of Trustees.
The Pension Payroll Agent oversees the Plan's pension payments. It ensures that the Plan's pensioners receive their monthly pensions by coordinating the automatic deposit to bank accounts in Canada or the mailing of cheques to those who reside outside the country. In addition, once a member terminates employment with an employer, the pension payroll agent, once informed by Plan staff, is responsible for paying or transferring out lump sum pension benefits for any member who chooses the commuted value.
The role of Legal Counsel
A variety of laws regulate the structure and administration of pension plans in Canada. Registered pension plans must work within laws such as the Income Tax Act, the Pension Benefits Act, Trust Law, Family Law, Human Rights, Worker's Compensation and Employment Insurance.