Thank you very much, Mr. Chair.
Good morning, members of the committee. My name is Kathleen Wrye. I'm the director of pensions policy at the Department of Finance. I'm here today to answer any questions with respect to federally regulated registered pension plans.
Under the Pension Benefits Standards Act, 1985, the federal government regulates the workplace pension plans of employers in areas of federal jurisdiction, such as telecommunications, banking and interprovincial transportation, as well as private pension plans in the territories. This represents 7% of pension plans in Canada.
The Pension Benefits Standards Act, 1985, imposes a fiduciary duty on plan administrators with respect to the administration of the plan and the investment of its assets. As fiduciaries, plan administrators must act prudently and in the best interest of all plan members and beneficiaries. As such, they must account for any factor that could materially affect the financial performance of the pension fund.
There is growing acceptance and expectation that environmental, social and governance, or ESG considerations should be taken into account when making investment decisions. The Canadian Association of Pension Supervisory Authorities, which is the national association of pension regulators, recently released its comprehensive risk management guideline to support pension plan administrators in fulfilling their fiduciary duty in giving appropriate consideration to ESG factors.
With respect to federally regulated plans, in budget 2022 the government announced it would move forward with requirements for the disclosure of ESG considerations, including climate-related risks. Following consultations, the department is working on regulatory amendments that will contain the detailed disclosure requirements.
Thank you.