In the May 2022 issue of InfoPensions, the Office of the Superintendent of Financial Institutions Canada (OSFI) reminds administrators of federally regulated pension plans that it is good governance practice for pension plan administrators to perform retiree and survivor audits. These audits help ensure that records are kept up to date by confirming that pension benefit payments from the pension fund continue to be paid to the correct person.
FCNB shares a similar view and invites administrators of NB registered pension plans to consult the guide below to learn more about how and why these audits should be performed.
Conducting a Retiree and Survivor Audit
Conducting regular retiree and survivor audits is viewed as a good governance practice for plan administrators. This process usually involves sending out letters requiring retirees and survivors to sign and return a form to confirm that they are still entitled to receive their monthly benefit payment. These audits can help plan administrators meet their obligation to retain and maintain accurate pension plan records, and in some instances, identify payments that should have stopped upon the death of a recipient. However, a pension benefit must not be ceased without concrete evidence that a retiree or a survivor is deceased.
A retiree’s or survivor’s failure to complete a form requested by the plan administrator or respond to a series of letters and phone calls should not be considered sufficient evidence or a reasonable basis to conclude that the retiree or survivor is deceased.
When attempts to contact the retiree or survivor by phone, mail or e-mail have failed, pension plan administrators should do their due diligence by following these best practices to establish concrete evidence that the retiree or survivor is deceased:
- Send a registered letter to the retiree or survivor.
- Contact the recipient’s family or in-case-of-emergency contact to obtain written confirmation that the individual is deceased.
- Contact the appropriate union to request that they search their records for the retiree’s last known address and contact information.
- Search online white pages.
- Review obituary announcements in local newspapers and/or funeral homes.
- Contact the financial institution where the pension payments are deposited or cashed.
- Contact the Vital Statistics Records office in each province and territory.
- Hire a search firm or agency to search public records to assist in finding the retiree(s) and/or survivor(s) or evidence of their death.
When contacting retirees and survivors, plan administrators should be sure that their communications and expectations are clear. It is also important to document and keep a record of all actions taken. A notice of the decision to stop pension payment should be sent by registered mail to the retiree’s or survivor’s last known address.
For any questions about these audits, please contact the Pension Division of FCNB at 1-866-933-2222 or by email at firstname.lastname@example.org.