New regulatory, technological and cultural developments are shaping the evolution of Canada's pensions and benefits sector in 2024.
Below are five factors impacting how pension plans and funds operate:
- Regulator Guidance. The Financial Services Regulatory Authority of Ontario (FSRA) published finalized guidance regarding general administrative monetary penalties. This guidance outlines the factors FSRA will consider when determining whether a general administrative monetary penalty will be imposed.
- Payroll Policy. The Canada Revenue Agency introduced an administrative policy effective January 1, 2024, that clarifies the determination of the province or territory of employment for remote employees. This policy affects deductions related to the Canada Pension Plan, Quebec Pension Plan, employment insurance, Quebec Parental Insurance Plan, and income tax.
- Employment Law. The shift to remote and hybrid work has introduced new legal considerations for employers with mobile workforces. Employment agreements should be updated, especially where outdated governing-law provisions risk the enforceability of agreements. As well, Ontario now requires fully remote workers to be included in mass termination counts, and a reminder that British Columbia employers are required to engage in workplace safety assessments for home offices.
- Domestic Investment. The 2024 federal budget announced the formation of a working group to explore greater domestic investment opportunities for Canadian pension funds. According to the budget papers, the stated intention of this initiative is to encourage pension funds to invest in sectors such as digital infrastructure, artificial intelligence (AI), physical infrastructure and venture capital.
- Artificial Intelligence. AI offers significant potential benefits for pension plan administration, including automation of repetitive tasks, enhanced data collection and improved member communication. However, its use also introduces risks such as data privacy concerns, cybersecurity threats and the potential for incorrect or misleading outputs. Regulators like the Office of the Superintendent of Financial Institutions have outlined expectations for managing these risks, emphasizing the need for robust governance frameworks and effective oversight.
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