by Ron Pink
Pension Plans have historically had a “dirty little secret”. They cannot locate all their beneficiaries – certainly those who have ceased working and are not actively retired. These “deferred Members” have moved/relocated and have not advised the Administrator of their new address. What is a Pension Plan Administrator (Board of Trustees) to do to protect the Plan and their fiduciary duties?
The problem never really arises until there is “money to be paid out” from the Plan. However, it is a problem that the Pension Plan should anticipate and deal with sooner rather than later. It is easier to find someone within a year of changing addresses than 30 years later and it is much less expensive.
The Trustees of the Pension Plan (Administrator) must have a policy and a plan in place to deal with this eventually. CAPSA has recently written a helpful Guideline on this matter entitled Guideline No. 9 dated February 2019.
However, from a practical point of view, I think Pension Plans should have a policy which includes some or all of the foregoing practical considerations:
- Every year the Plan must send correspondence to each of its beneficiaries. This newsletter must include provisions for modifications of a notice and change of address. If the Member has changed address perhaps the communication will be forwarded to their new address. Certainly this is more likely within the first year than after 30 years.
- The Administrator must obtain an email or other address of Members, ie; Facebook, Twitter, Instagram etc. Finding your current Members on social media can be so much easier when it is done earlier, rather than waiting for many years to pass.
- Every year when you receive the “return to sender” envelopes from your Members, you must have a person in place who will locate those unresponsive Members. That process must take place immediately upon receipt of the undelivered correspondence.
- The Pension Plan may want to take the opportunity to access any number of other means of locating beneficiaries, such as:
(1) Addresses of the Members in the Health and Wellness Plan;
(2) The Union may have an address;
(3) The Employer may have a forwarding address;
(4) Former Employees and coworkers may actually know where the person has moved. The sooner you attend to this issue, the better off your Plan will be.
- If the foregoing fails, then you must act in other ways. You must have the Administrator start a “hard search” which may include:
(1) Canada Revenue Agency search;
(2) Provincial Government search – through the Public Trustee; or
(3) Other means.
The Boards of Trustees must establish a policy now and that they must implement that policy and have a process to ensure that the policy is being complied with every year.