Changes Coming to Statement of Investment Policies and Procedures (SIP&P) for Pension Plans
Effective January 1, 2016, plan administrators for pension plans must file the plan’s Statement of Investment Policy and Procedures (SIP&P) with the Financial Services Commission of Ontario (FSCO).
In addition to being required to file the SIP&P with FSCO, the plan administrator must now include information on how the company (if applicable) chooses which environmental, social and governance (ESG) factors are taken into consideration when selecting investment options for the plan members.
Please be aware that it is not mandatory for plan administrators to include ESG factors in their investment selection process. If ESG factors are part of the plan’s investment strategy, plan administrators must include information on how the ESG factors are included. Unfortunately, FSCO has not yet provided additional information on what may be considered ESG factors. Cowan will provide updates as they become available.
Along with submitting the SIP&P to FSCO, plan member annual statements will have to include information about the SIP&P.
- A statement informing plan members that the plan administrator has a SIP&P in place for the pension plan must be included on the annual member statement, along with information on how plan members can access a copy of the SIP&P.
- The plan administrator must also include information on how ESG factors are incorporated into the SIP&P, if the company decides to take ESG into consideration when selecting investment options.