39 Questions
What does effective governance of a pension plan define?
Roles and responsibilities for administration, financial management, and investment management
What are some risks associated with poor governance of a pension plan?
Regulatory audits, fines, and correction costs due to errors
What is one benefit of effective governance of a pension plan?
Increased member appreciation and confidence
Among the operational responsibilities of a pension plan sponsor, which is essential for sound plan management?
Monitor service providers
In effective plan governance, what is the formal framework that defines tasks and duties involved in a pension plan?
Tasks and duties related to operation, management, and oversight
What is the significance of fulfilling fiduciary duty in pension plan governance?
Increased efficiency and reduced risk of loss
What is the primary role of a pension committee in the administration of a pension plan?
Assisting in decision-making and providing oversight on plan matters
What fiduciary responsibility does a pension plan administrator have in relation to plan members?
Ensure plan members receive promised benefits
What concept does the 'two-hats' theory refer to in the context of corporate employers sponsoring a pension plan?
Dual roles of the employer as company and plan administrator
In which Canadian court case was the importance of good pension plan governance highlighted?
The Indalex Decision by the Supreme Court of Canada
'What is a key difference between the fiduciary responsibilities of sponsors taking an active role in a Group RRSP compared to those acting as mere agents?'
Sponsors acting as mere agents must ensure regulatory compliance.
What is one of the key principles of the CAPSA Governance Guidelines for effective pension plan governance in Canada?
Establishing a code of conduct to manage conflicts of interest
How do most CAP administrators provide investment information to plan members?
Directly or through recordkeepers/investment managers
What is a factor CAP sponsors should consider when establishing criteria for selecting service providers to provide investment advice to members?
Review of complaints and disciplinary actions against advisors or firms
What is included in a member statement that CAP sponsors should provide to plan members on an ongoing basis?
Summary of investments and investment activity
What does CAP stand for in the context of the text?
Credible Annual Pension
Why do many members not engage with the investment information provided by CAP administrators?
Information is provided to members who may not utilize it
What should CAP sponsors do if the investment options no longer meet the criteria used for reviewing them?
Consider appropriate actions based on non-compliance factors
Which of the following is NOT a factor CAP sponsors should consider when establishing criteria for selecting service providers to provide investment advice to members?
"Consistency in work attire"
What is the main duty outlined for pension advisory committees?
Promoting plan awareness
In which Canadian province must pension plans have written rules covering key governance areas?
Québec
Why might a plan administrator want to comply with the CAPSA Governance Guideline and CAP Guidelines?
To manage risks and improve plan performance
What type of pension plan has contributions made by both the employer and the employee into individual accounts for each participant?
Defined Contribution Plan
Which Canadian jurisdictions focus more on governance due to increased concern about at-risk plans?
Federal, Ontario, Alberta
Why do administrators of DC pension plans that are CAPs need to consider both CAPSA Governance Guideline and CAP Guidelines?
To address investment risks faced by members
What do the CAP Guidelines aim to achieve with respect to regulatory outcomes?
Achieve consistent regulatory outcomes
Which CAPSA guideline focuses on aiding in demonstrating investment prudence?
Guideline No. 6: Prudent Investment Practices
What is the main objective of Guideline No. 7 issued by CAPSA?
Focusing on developing funding policies for DB plans
In which province must committees create and update governance rules every three years?
Manitoba
CAP sponsors are not required to establish a governance framework for plan administration according to the CAPSA Governance Guidelines.
False
One of the principles of the CAPSA Governance Guidelines is to avoid providing appropriate information to governance participants.
False
CAP administrators do not need to identify and manage plan risks according to the CAP Guidelines.
False
Establishing a code of conduct to manage conflicts of interest is not part of the principles of the CAPSA Governance Guidelines.
False
Most CAP administrators provide investment information directly to plan members without involving recordkeepers or investment managers.
False
CAP sponsors do not need to consider legal requirements for providing investment advice when selecting service providers.
False
CAP sponsors are not required to provide an annual performance report for each investment fund according to the CAP Guidelines.
False
If investment options no longer meet the criteria used for reviewing them, CAP sponsors should not consider member complaints as a factor in deciding action.
False
CAP sponsors do not need to notify plan members of significant changes to investment options on an ongoing basis according to the CAP Guidelines.
False
If investment options no longer meet the criteria, remaining CAP investment options should not be considered in decision-making according to the text.
False
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