Pension committee meetings
A pension committee must hold meetings to adequately monitor a plan's current administration of business matters (e.g., to verify pension fund performance, the conformity of investments, have reports prepared) and to make decisions.
A pension committee's operating rules must set out the number of meetings the committee is to hold to be able to meet its obligations adequately. Generally, the number of regular meetings are specified in the rules as well as the possibility of calling special meetings.
The number of meetings usually depends on the the plan's characteristics and administration. Meetings are often held quarterly. In the case of larger plans, they are generally held on a monthly basis.
In the case of defined contribution plans, it is important to hold meetings even if administration of the plan has been entrusted to a financial institution. Meetings must also be held in cases where the members decide on investments.
Procedures for meetings
The committee must set out rules to ensure the meetings run smoothly. These rules must be adapted to the pension committee's characteristics.
It is customary to provide members with a written notice of meeting and an agenda along with the documents required for making decisions and monitoring. In this way, members will be prepared to attend the meetings.
Each member must have the opportunity to speak before voting. The internal by-laws should include rules to that effect, for example allocating time for each member to express his or her point of view.
Every committee member has the right to vote, except the non-voting member designated at the annual meeting (also called "additional member").
The proportion of votes required to adopt a motion should be indicated in the plan text. If the plan text is silent on this point, the internal by-laws can indicate the required proportion. If both the plan text and the internal by-laws are silent on the matter, decisions are adopted by a majority of the members (including both those present and those absent), that is, by a proportion of 50% plus one.
A decision of the committee may not be made by the group parity method, that is, one vote being given to each group of members: members designated by the employer, the union and the plan members at the annual meeting.
In the event of a tie vote, a committee member may have a deciding vote. The committee's decision is therefore based on that member's vote. The plan text can indicate which member has the deciding vote. If the plan text is silent on this point, it can be specified in the internal by-laws.
Under the Supplemental Pension Plans Act, a deciding vote cannot be given to a member designated by the employer, union or the members instead of taking into account a member's vote. Such a practice deprives a member of the right to vote.
The pension committee should keep minutes of its meetings. They are important for showing how the committee carried out its duties. The minutes must reflect the items on the agenda and provide explanations as to how the decisions were made, the reasons supporting them and the committee's supervisory activities. The members of a committee should approve the minutes for each meeting to ensure they reflect their discussions and decisions.
For more information about the committee's other operating rules, refer to: