BCFSA Outlines Best Practices for Triennial Assessments

As pension plan administrators prepare their next triennial plan assessments, they should consider BCFSA’s newly-published Guideline which outlines expectations and best practices for preparing and documenting these assessments.

The Guideline (https://www.bcfsa.ca/media/4831/download) signals that BCFSA expects triennial assessments to be more than a compliance checklist. Rather, they should support a meaningful review of plan governance and demonstrate how administrators are monitoring and improving their governance practices over time.

Three themes stand out:

Assessments should demonstrate judgment, not simply describe the process followed.

Administrators should identify areas for improvement, establish clear action plans, and follow up over the assessment cycle.

Assessments should take a forward-looking approach to risk management, consistent with CAPSA Guideline No. 10 on Risk Management (https://www.capsa-acor.org/Documents/View/2101).

Our Comments

We welcome this dedicated guidance from BCFSA on triennial pension plan assessments, the first since the requirement came into force in 2015. The Guideline is helpful because it translates practical governance review experience into best practices and identifies common shortfalls for administrators to avoid.

In our view, the most important message is that the assessment should not be treated as a simple filing exercise. A well-prepared assessment should help boards, committees, and those tasked with overall plan governance step back and consider whether the plan’s governance structure, decision-making processes, risk oversight, service provider monitoring, member communications, and documentation practices remain appropriate for the plan’s current circumstances.

The value of the assessment lies in the discipline it creates. When done well, it provides evidence of good governance practices: issues are identified, judgment is exercised, action items are assigned, progress is tracked, and prior recommendations are revisited as circumstances evolve.

The Guideline does not prescribe a single format, which is appropriate: the assessment should be proportionate to the size, complexity, and risk profile of the plan. In all cases, administrators should be able to show how the assessment process contributes to continuous improvement in plan governance.

We can support clients in applying the Guideline in a practical way, with a focus on effective plan management and developing an assessment that helps identify a clear, actionable path forward.