Pension plan governance and risk management: A Canadian perspective

Caroline L Helbronner
2005 Pensions An International Journal  
both generally impose primary legal responsibility for the administration and operation of employer-sponsored pension plans and their related pension funds on the employer that maintains the plan. In the case of a corporate employer, this will generally mean that ultimate legal responsibility for the administration of such a plan rests with the board of directors of the employer. The provisions of the PBA in this regard are as follows. Subsection 22(1) of the PBA requires the administrator of a
more » ... pension plan (ie the principal employer under the plan) to exercise 'the care, diligence and skill in the administration and investment of the pension fund that a person of ordinary prudence would exercise in dealing with the property of another person'. Subsection 22(2) of the PBA requires that, in the course of administering a pension plan and What is pension plan governance? Legal framework for pension plan governance Abstract This paper, which has a Canadian focus, reviews the principal legal and financial risks associated with the operation of a pension plan. The author demonstrates that appropriate pension plan governance is an important tool in minimising the exposure to legal liability and the associated financial risks. She goes on to conclude that a properly constructed governance process coupled with the performance of periodic governance audits should permit plan sponsors to identify potential sources of obligation. They can then deal with them before they result in financial cost to the plan sponsor and, possibly, its directors and senior management.
doi:10.1057/ fatcat:cjlvybj5pvdc5d4elfhqr6hzom