Duties of the plan administrator

Pension plan administration involves:

• financial duties, consisting of pension fund management
• administrative duties, pertaining to the day-to-day administration of the plan.

The financial duties include:

• ensuring that employer contributions and member contributions (if any) are paid into the pension fund within the prescribed period and that the amounts received correspond to the amounts prescribed by the plan and, if applicable, actuarial valuation report
• paying pensions and benefits, refunding or transferring accrued benefits
• adopting an investment policy adapted to the plan's characteristics and financial obligations
• monitoring investments and ensuring that they respect the plan's investment policy
• in the case of a defined contribution plan in which members make the investment choices, ensuring that at least 3 investment options are offered by the pension plan.

  The options must have different degrees of risk and expected rates of return, which will allow the creation of portfolios that are generally well adapted to the members' needs

• having the pension fund's financial statements audited by an accountant

  Insured plans and simplified pension plans are exempt from an audit. If the administrator so requests at the annual meeting, plans having less than 50 members and beneficiaries and net assets with a market value of less than 1 000 000 $ can also be exempted.

• filing an annual information return with the Régie des rentes du Québec and the Canada Revenue Agency
• for a defined benefit plan, having the required actuarial valuation prepared by an actuary and filing the actuarial valuation report with the Régie and the Canada Revenue Agency

  The purpose of the actuarial valuation is to determine the current service contributions to be paid into the pension fund and the amount of the benefits set forth in the plan on a funding basis (going concern) and on a solvency basis (termination of the plan).

The administrative duties include:

• ensuring that eligible workers enroll in the plan. In order for the administrator to be able to perform this duty, the employer must provide the necessary information on the workers
• ensuring that plan members and beneficiaries receive the statements and other information provided for under the Supplemental Pension Plans Act depending on whether it is a defined contribution plan, a defined benefit plan or a simplified pension plan
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  Information and documents can be sent electronically. As a precautionary measure, the administrator should follow the guidelines set out in Electronic Communication in the Pension Industry from the Canadian Association of Pension Supervisory Authorities (CAPSA).

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• answering questions from plan members and beneficiaries about their rights and obligations.
• for a defined contribution plan or a defined benefit plan, holding an annual meeting, to which the members, beneficiaries and the employer are called, to report on the pension plan's administration
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  The annual meeting may be held via videoconference or any other means of electronic communication. However, the plan's internal bylaws should indicate as such. Even if they do not, the meeting is considered official provided the members and beneficiaries give their consent.

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• having amendments to the plan registered with the Régie des rentes du Québec and the Canada Revenue Agency
• selecting service providers (accountant and others) and monitoring their work.

To find out more...

Instalments 4 and 5 of the collection Administering a pension plan well