FSRA’s intepretation

FSRA defines a retroactive adverse amendment as an amendment which:

• May negatively impact members’ or beneficiaries’ rights and/or benefits
• Purports to be effective on a date before it is filed with FSRA

FSRA’s interpretation of the Act is that these types of amendments are generally not permissible. FRSA may refuse to register any amendments that it deems to be retroactive adverse amendments.

In determining whether to register an amendment, FSRA will consider these questions:

• Has the proposed amendment been communicated to plan members and beneficiaries prior to filing with FSRA?
• Have any concerns been raised by plan members with respect to the proposed amendment?
• What are the reasons for the retroactive filing?
• Does the amendment treat plan members and beneficiaries equitably?

Examples of retroactive adverse amendments include but are not limited to:

• Reductions in accrued benefits prior to the date the amendment is filed
• Increases in the defined benefit member contribution rate prior to the date of filing
• Removal of portability rights for plan members who have reached early retirement age under the plan terms
• Removal of a variable indexation formula or replacing that formula with a fixed indexation rate

Retroactive adverse amendments may be applied in relation to the period after the date the amendment is filed with FSRA but prior to the date the amendment is registered by FSRA.

Notice requirements for adverse amendments

Before a plan asks FSRA to register a retroactive adverse amendment, the plan administrator must issue notices to any member or beneficiary affected that must:

• Not contain the word “adverse”
• Provide an appropriate description or explanation of the amendment
• Indicate that questions or comments about the amendment can be provided to the administrator or FSRA
• Not affect the filing of the amendment

As described under section 26 of the Act, there is a 45-day period after the date of providing notice before FSRA may register the amendment.

Next steps

The guidance came into effect June 4, 2024. It will be reviewed no later than June 4, 2029.

Plan sponsors currently considering an adverse amendment are encouraged to discuss the permissibility of the amendment with FSRA prior to filing.