CIA Makes Recommendations to CAPSA Regarding ESG Considerations in Pension Plan Management
January 11, 2023
In response to a consultation on a draft guideline regarding ESG (environmental, social and governance) considerations in pension plan management, the Canadian Institute of Actuaries (CIA) made recommendations to the Canadian Association of Pension Supervisory Authorities with a view to improve its use by pension plan administrators. The CIA emphasized the systemic risk posed by climate change on pension plans and the capacity of plan sponsors to meet their long-term goals and obligations.
They also noted that “a consideration not addressed in the draft guideline is that climate change may also affect longevity and how long pensions are paid. Incorporating ESG considerations in pension plan management is vital for the plan’s assets and liabilities”, and “a second consideration not addressed in the guideline is whether pension plans should have a duty to promote sustainability beyond their fiduciary duty to secure retirement benefits”.
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