From: Jason Vary Sent: Tuesday, June 26, 2018 10:32 PM To: Pensions / Pensions (FIN) Subject: Proposals for an Unclaimed Pension Balances Framework The following comments are my own personal comments and do not represent the comments of my employer or any other organization that I’m a member of. By way of background, I’m an actuary that has been practicing in the field of pensions for over 20 years. The firm that I work for provides actuarial and third-party administration services to pension plans registered primarily in Ontario and Federally. I would highly support the designation of the Bank of Canada as an entity for the receipt of unclaimed pension balances in the case of a terminated federally regulated pension plan. In fact, I would go a step further and allow the Bank of Canada to be such an entity if so designated under the pension legislation of any Canadian province. This would provide the provinces with the ability to further leverage the Bank of Canada’s existing infrastructure and experience. In my view, it would be sensible to apply the same rules that would apply to unclaimed bank balances with respect to interest, fees, prescription periods, etc. I am in agreement that applying this framework first to terminated pension plans is sensible as that is where there is the greatest need. If successful, the framework should be extended to ongoing pension plans. With respect to the tax considerations, the proposed approach to withhold income tax when the pension administrator pays the pension balance to the Bank of Canada appears very problematic to me. For instance, if the top-marginal tax rate is used, this will be “too much” tax for many individuals; however, if a lower tax rate is used, then the framework could be subject to tax arbitrage by highly-paid individuals. I would propose that without too much added complexity, the pension balance is paid pre- tax to the Bank of Canada and tax be withheld and a T4A slip issued if/when the claimant is paid. Also, in order to appease potential concerns from the pension regulators, it may be worthwhile to explore the possibility of retaining the “locked-in” nature of the pension balance (plus tracking the portion of the balance that exceeds the maximum transfer value under ITA Regulation 8517) so that the framework is not used as a venue to unlock pension funds unscrupulously. Thank you for inviting stakeholders to provide comments on the proposals and feel free to contact me if you have any questions with respect to my submission. Regards, Jason. Jason Vary, FCIA, FSA President Actuarial Solutions Inc. making it simple® 466 Speers Road, 3rd Floor Oakville, ON L6K 3W9 Phone: (905) 257-2038 or (877) 257-2038 Fax: (519) 979-4699 or (866) 323-7201 www.actuarialsolutionsinc.com