Statement of investment policies and procedures (SIPP)

A buyer reviewing the governance papers of an inherited pension plan meets the SIPP. It is one document to ask the pension plan administrator for. See what happens to the pension or benefits plan on a sale.

Federal requirement

Under s.7.1 of the Pension Benefits Standards Regulations, 1985, the administrator must establish the written statement before the day the plan is registered, for the plan’s portfolio of investments and loans other than those relating to any member choice account. It covers policies and procedures on categories of investments and loans, diversification, asset mix and rate of return expectations, and liquidity, among other listed matters, having regard to all factors that may affect the plan’s funding and solvency and its ability to meet its financial obligations. Section 7.2 requires the administrator to review it, and confirm or amend it, at least once each plan year.

Ontario requirement

Section 78 of Regulation 909 under Ontario’s Pension Benefits Act requires the administrator of a pension plan to establish a statement that meets the federal investment regulations as modified in that Regulation. It must say whether environmental, social and governance factors are incorporated into the plan’s investment policies and, if so, how. The section also requires the statement and its amendments to be filed. Under s.78.1, despite s.78, no statement is required if all the plan’s pension benefits are defined contribution benefits and the investments are directed entirely by the members.

What to ask

• For the current statement and every amendment
• When it was last reviewed
• Who administers the plan

This entry covers the federal regulations and Ontario only; check the rules where you are.