Restrictions imposed under the Disaster Risk Management (Enforcement Measures) Orders (“Disaster Orders”) have forced several of us to be innovative when it comes to doing business. The Trustees of approved superannuation funds are no different and some have been implementing various “work-arounds” to ensure that pension fund matters continue smoothly in these times.
In managing a pension fund, trustees may find that amendments to the constitutive documents become necessary. If amendments are not done in accordance with the requirements under the Pensions (Superannuation Funds and Retirement Schemes) Act and the Governance Regulations thereunder (“the Pensions Act”), the possibility exists that an amendment application could be rejected by the Financial Services Commission (“FSC”) and the Trustees directed to re-do the amendment process. As the process can be involved and at times protracted, plus given that confirmation that the process was completed satisfactorily may not be immediately forthcoming, trustees ought to strive to comply strictly with legislative requirements.
The Pensions Act requires the trustees to submit the proposed amendments to all participants of the pension fund, i.e.- active members, deferred pensioners and pensioners, for their review. All participants are then to be invited to a meeting to vote on and approve the proposed amendments before an application is made for the approval of the FSC. Without the added restrictions under the Disaster Orders, some trustees already have a difficulty locating all participants who are entitled to receive notice of amendments and of the meeting at which they are to be considered. In particular it is at times difficult to locate participants who are no longer employed to the sponsor of the pension fund and whose contact details have changed. Further, as some pension funds have members located island-wide, there is a logistical issue of whether it is possible to have a single participants’ meeting at one location.
The restrictions under the Disaster Orders have added to the list of considerations for trustees who cannot or wish not to wait until Jamaica’s Covid-19 woes are yesterday’s news. The Prime Minister has ordered that there are to be no public gatherings of 10 persons or more; where persons are gathered, they are to observe physical distancing of 6 feet; and persons 65 years and older are to stay at home. This removes all likelihood of having a physical participants’ meeting. Pension funds tend to have tens, hundreds, even thousands of participants and a good number of same may be pensioners over the age of 65 years who must be invited to the meeting. There is nothing in the Pensions Act that requires that there be a ‘physical’ meeting, but a meeting there must be.
Consideration may therefore be given to whether a virtual online meeting could be held which would satisfy all the requirements under the Pensions Act. The constitutive documents themselves may have provisions addressing amendments and participants’ meetings and should be checked to ensure a virtual meeting would be satisfactory. In planning such a meeting, one would have to ensure that there are reliable avenues for:
- verifying the identity of the participants who join the meeting and possibly taking a register of attendees;
- collecting proxy forms and verifying the identity of proxies;
- confirming the presence of a quorum;
- explaining amendments proposed;
- feeding questions from participants;
- voting by participants on a chairman for the meeting, if applicable,
- voting on the approval of the amendments, participants being restricted to one vote and approval being given in writing; and
- recording minutes.
Given the technological advances to date it is unlikely that a solution satisfying all of the above requirements could not be found if the assistance of those with the necessary expertise is sought. However, a virtual meeting runs the risk of excluding some participants who may lack the means and skill to participate in the meeting. Trustees would therefore need to give thought to the percentage of persons who may be so excluded and the probability that such persons would participate if the meeting was a physical meeting. Further, whether a determined drive for the appointment of proxies could mitigate against such exclusion. Trustees would also have to be prepared for eventualities associated with the technology to be employed. Having regard to the foregoing, prudence dictates that before convening any such meeting trustees seek the blessing of the FSC as to whether the proposed meeting and related measures would be acceptable.
It is a saying that “all things happen for a reason” and perhaps we can move forward from the pandemic having adapted for the better. There are several statutes that require meetings to be held for one reason or another and they are not all capable of being interpreted to include virtual meetings. Covid-19 has certainly showed us that as mankind finds new ways of achieving desired outcomes, it may be time to update our laws in tandem with such changes. It was once suggested that the Phase II amendments to the Pensions Act, which has been years in the making, would remove the requirement to submit proposed amendments to constitutive documents for the approval of participants. This would be a welcome change in light of the inability to predict if and when the world will be rid of SARS-CoV-2.