Good Governance Benefits Alliance overview of strengthening governance

Good Governance Benefits Alliance overview of strengthening governance structures

Agenda What is good governance Why is good governance important Roles & responsibilities Plan documentation Plan review process – assisting in good governance 2

What is Governance? The structure and processes in place for the effective administration of the plan to ensure the fiduciary responsibilities of the plan administrator are met. The objective of plan governance is to enable the plan administrator to deliver on the pension promise consistent with the plan documents and applicable legislation. CAPSA (Canadian Association of Pension Supervisory Authorities) 3

Good plan governance is a differentiator As an effective advisor or consultant, embracing governance requirements will help to provide tremendous value for your clients and will assist you in providing guidelines that will keep everyone on track throughout each year. Good governance emphasizes process, not results Having good processes might not stop some members from making claims, but will provide a strong defence against liability 4

Maintaining a solid governance framework Starts with itemizing the plan-related responsibilities – for example in the Governance Policy & the Governance Best Practices documents Identify gaps and clearly define parties responsible for: Making recommendations Decision making Reporting to the committee / board, etc. 5

Why is governance important? Good governance Risk management techniques Contributes to positive plan performance Keep a record of reasons for each decision made Helps reduce errors Keep up-to-date on legal and other developments Helps ensure a secure retirement for employees Reduces potential liability Creates accountability amongst all parties Engage in continuous education and review of process Learn from past experience 6

Fiduciary roles & responsibilities. Everyone plays a role Plan Sponsor Plan Administrator (pension committee where established) Plan Members Plan Advisor 7

Establish strong documentation to support the process Having supportive documentation will keep all interested parities more involved and engaged in duties and responsibilities – starting with: Governance Best Practices (all) Governance Policy (RPP) Governance SIP&P (RPP Pension Committee Establishment (RPP) 8

Have a strong plan review process CAP Plan Review Template GRS Governance Assessment Utilizing both annually will assist plan sponsors to understand the plans overall picture, know where the members are investing and where to assist members (ie communication strategies) 9

Plan review process (continued) Meeting with the plan sponsor at least annually will help to solidify overall knowledge of the plan Determine any changes needed on the funds on the platform Establish concrete information on member behaviour Ascertain the next years overall plan to move forward ie member presentations & communications 10

“ Having solid understanding of good governance will add strength to the retirement plan overall. CAPSA ” Governance may seem overwhelming but once established, it will assist everyone in knowing what their role is and how best to deliver results that matter. 11