Mr. Speaker, on behalf of the PC Party of Canada it is a pleasure to rise to take part in this debate on Bill C-226, an act to amend the Pension Benefits Standards Act.
This bill would amend the Pension Benefits Standards Act insofar as it would require the administrators of a pension plan to prepare a specific annual report. This report would summarize the social, ethical, and environmental factors that were considered during the previous fiscal year in the selection, retention and liquidation of investments under the administrator's responsibility. A copy of the report would have to be provided to every member who requested it.
The PBSA is an act respecting pension plans that are organized and administered for the benefit of persons employed in connection with certain federal works, undertakings and businesses. The Canada pension plan does not come under the auspices of the PBSA. This proposed requirement to compel an administrator to file a report listing the social, ethical and environmental factors that might have been involved when making investments seems, perhaps, redundant if, in fact, it is accountability on investment criteria that the private member is seeking.
One can only assume why this amendment was put before the House. Possibly the hon. member did not want any pension administrator investing funds in certain companies for various reasons, ethical governance breaches, companies having suspect foreign practices or companies operating with a poor environmental track record. These are important issues that the employees and employers party to any private pension plan in a federally regulated undertaking should take note of. However, there is more than one way to ensure that pension plan administrators invest in an economically sound and prudent fashion.
The increase of regulatory requirements, which is what this bill would bring, might not be the answer to any real or perceived accountability problem. Parliament should be looking at ways to reduce regulatory requirements as opposed to increasing them while still ensuring the efficacy of any legislation.
Bill C-226 proposes to amend subsection 7.4(1) of the act, ostensibly to ensure that the administrator's investments are ethically and environmentally sound, et cetera. This amendment might not be needed considering the other sections that already exist in the act.
Section 7 of the act currently stipulates how some administrators are appointed. This section could possibly be used to ensure that any administrator appointment invest according to the wishes of the employer or employee. There are accountability safeguards already in place. Section 7 reads as follows:
- (1) The administrator of a pension plan shall be
(a) in the case of a multi-employer pension plan established under one or more collective agreements, a board of trustees or other similar body constituted in accordance with the terms of the plan or the collective agreement or agreements to manage the affairs of the plan;
(b) in the case of a multi-employer pension plan not described in paragraph (a), a pension committee constituted in accordance with the terms of the plan, subject to section 7.1, to manage the affairs of the plan; or
(c) in the case of a pension plan other than a multi-employer pension plan,
(i) the employer, or
(ii) if the plan is established under one or more collective agreements and the terms of the plan or the collective agreement or agreements to manage the affairs of the plan provide for the constitution of a board of trustees or other similar body, that body.
(2) In the case of a simplified pension plan, the administrator of the pension plan shall be the prescribed person or body.
7.1 A pension committee must
(a) if a majority of the pension plan members so requests, include a representative of the plan members; and
(b) if the pension plan has fifty or more retired members and a majority of the retired members so requests, include a representative of the retired members.
Thus, we already have in place provisions where investors can actually be involved in scrutinizing the investment.
Section 8 of the act also deals with accountability issues, namely the standard of care that must be exercised by administrators when investing funds.
Section 13 deals with information that the administrator must furnish to the Superintendent of Financial Institutions. Section 13 states:
The administrator of a pension plan shall provide to the plan members, former members and any other persons entitled to pension benefits or refunds under the plan, at the time and in the manner specified by the Superintendent, any information that the Superintendent specifies.
Section 13, if utilized, could possibly be used as a tool to get the information that Bill C-226 seeks without the amendment. In other words there are already sections in the act to do what the amendment intends to do.
Furthermore, not rooted in any legislation is the premise that pensioners need only ask administrators for the social, ethical and environmental indices he or she took into consideration when administering the pension's funds.
Should the administrator not want to furnish the information, there are certain avenues open to the information seeker. Some are legislated avenues and some are not.
In addition, if the administrator feels unduly constrained by various criteria concerning investment standards, environmental or otherwise, the pensions and pensioners might suffer financial hardship if an administrator shied away from excellent investment opportunities that have negligible environmental breaches.
The bottom line is that pensioners want money in their bank accounts so they can put food on the table and a roof over their head.
On strictly a housekeeping note, this amendment should not be proposed as subsection 7.4(1.1). Rather the new amendment should properly be placed with the rest of the administrative reporting requirements as listed under section 12. It is important to keep legislation coherent and all possible provisions that deal with similar matters should be grouped together. Section 12 is titled “Duty to Provide Information”. This, one would think, is where the amendment should go.
On a final note, sections 33 to 37 are the inspection and enforcement provisions of the act. Certainly at first glance they seem fairly well equipped to deal with unruly administrators.