New Funding Framework for Defined Benefit Pension Plans in Ontario
As announced earlier this year and reported in the May 30, 2017 edition of Straight Talk, the Ontario Ministry of Finance initiated a review of the Province’s solvency funding framework for defined benefit plans. Now that the review process and consultation with stakeholders is near completion, the government intends to introduce legislation in the fall of 2017.
In order to prepare for the changes being contemplated, plan sponsors may want to consider looking at their plans and specific situation, including variables such as the maturity of their plan, the current contribution structure, the asset mix, plan provisions, risk tolerance, and variables beyond plan financials. At the recent Association of Canadian Pension Management (ACPM) event entitled, “Ontario Funding Reform,” it was advised that given the funding reform coming and in light of the new 85 per cent plan funding target level, plan sponsors should look at their going concern valuation assumptions as these valuations could be much more relevant in the future.
The ACPM session noted that the future state after the implementation should provide a more moderate and predictable contribution model that allows for investing based on the sponsor’s horizon and tolerance. In addition, the ACPM made recommendations with respect to the Level of Provision for Adverse Deviation and specifically how it should vary and how it should be funded.
Additionally, it was noted at the ACPM event that it could be worth exploring the impact of these funding reforms on plan sponsors' financial statements and on their accounting statements. Furthermore, Ontario’s funding reform can be a great catalyst to review the ultimate objective of the plan and to make sure that the investment policy is tied to that goal. Lastly, with the funding reforms coming, the event reinforced that it is also an important time to review and firm up funding and governance policies.
For more information on Ontario’s Solvency Funding Review, view the Ontario Ministry of Finance’s webpage.
In This Edition:
- BNY Mellon Releases its Quarterly Global Network Report
- Change to Registration BIC Code for Spain - BNY Mellon NetInfo®
- BNY Mellon NetInfo® - Live BNY Mellon Audio Webcast on RQFII
BNY Mellon Releases its Quarterly Global Network Report
The third 2017 quarterly report on the status of BNY Mellon's global network is now available.
This report is a summary of BNY Mellon's global subcustody network across 100+ markets, including market-specific details about its subcustodian in each local market. The report includes details about market disruptions, subcustodian credit ratings, as well as any recent subcustodian changes.
To obtain a copy of the full report, or to receive it automatically each quarter, please contact your CIBC Mellon Service Director or Relationship Manager.
Change to Registration BIC Code for Spain - BNY Mellon NetInfo®
In BNY Mellon’s NetInfo® bulletin, transmitted on October 10, 2017, BNY Mellon noted that on November 6, 2017, the registration Bank Identifier Code (BIC) associated with the company for the Spanish market will be changing to IRVTUS3NIBK from BSDTUS33GBL. BNY Mellon advises clients to quote IRVTUS3NIBK as the registration BIC code in all trades from settlement date November 6, 2017. Furthermore, BNY Mellon confirms the current registration BIC will no longer be used on the market after that date.
According to the bulletin, Spain is a registration name market and registration details have to be provided with all trades to avoid failed settlement. BNY Mellon and CIBC Mellon encourage clients to share this information with the appropriate people within their organization as well as with their counterparties.
For more information, view BNY Mellon’s NetInfo® bulletin. Contact your CIBC Mellon Service Director or Relationship Manager.
BNY Mellon NetInfo® - Live BNY Mellon Audio Webcast on RQFII
In a BNY Mellon NetInfo® bulletin transmitted on October 10, 2017, BNY Mellon announced that it is proud to present an upcoming live audio webcast presentation entitled, “RQFII - What's Next for Global Fund Managers?” on Tuesday, October 31, at 9 a.m. ET.
BNY Mellon confirms in its bulletin that this webcast will be jointly presented by Magdalene Tay from BNY Mellon Asset Servicing and Choo Lye Tan from K&L Gates. They will provide an overview of Renminbi Qualified Foreign Institutional Investor (RQFII), compare different access schemes in China, describe future trends and impacts, and discuss ways to access the RQFII scheme.
For more information, view the NetInfo® bulletin and contact your CIBC Mellon Service Director or Relationship Manager if you have any questions or would like to register.