- News Release 2006-020 -

Notice is hereby given, that the Governor in Council, pursuant to the definition "surplus"[a] in subsection 2(1), to subsection 9(1), to paragraph 10.1(2)(b)[b], to subsection 12(3), to paragraph 28(1)(b)[c] and to section 39[d] of the Pension Benefits Standards Act, 1985[e], proposes to make the annexed Solvency Funding Relief Regulations.

Interested persons may make representations concerning the proposed Regulations within 30 days after the date of publication of this notice. All such representations must cite the Canada Gazette, Part I, and the date of publication of this notice, and be addressed to Diane Lafleur, Director, Financial Sector Division, Department of Finance, L'Esplanade Laurier, 20th Floor, East Tower, 140 O'Connor Street, Ottawa, Ontario K1A 0G5 (tel.: (613) 992-5885; fax: (613) 943-8436; e-mail: lafleur.diane@fin.gc.ca).

Ottawa, June 2, 2006

Diane Labelle
Acting Assistant Clerk of the Privy Council

Her Excellency the Governor General in Council, on the recommendation of the Minister of Finance, pursuant to the definition "surplus"[f] in subsection 2(1), to subsection 9(1), to paragraph 10.1(2)(b)[g], to subsection 12(3), to paragraph 28(1)(b)[h] and to section 39[i] of the Pension Benefits Standards Act, 1985[j], hereby makes the annexed Solvency Funding Relief Regulations.


Archived - Solvency Funding Relief Regulations

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Interpretation

1. (1) The following definitions apply in these Regulations.

"acceptable rating" means the rating given by a credit rating agency to an issuer at the time of the issuance or renewal of a letter of credit that is at least equal to one of the following ratings from the applicable credit rating agency:

(a) A, from Dominion Bond Rating Service Limited; 

(b) A, from Fitch Ratings;  

(c) A2, from Moody's Investors Service; or  

(d) A, from Standard & Poor's Ratings Services. (note acceptable)

"Act" means the Pension Benefits Standards Act, 1985. (Loi)

"bank" means a bank or authorized foreign bank within the meaning given to those terms in section 2 of the Bank Act. (banque)

"beneficiary" means a member or a former member of a plan or any person who is entitled to pension benefits under the plan except

(a) a former member who has transferred or elected to transfer their pension benefit credit under section 26 of the Act; and

(b) a former member for whom the administrator has purchased an immediate or deferred life annuity. (bénéficiaire)

"beneficiary representative" means a union representative or court-appointed representative of a beneficiary. (représentant des bénéficiaires)

"cooperative credit society" means a cooperative credit society to which the Cooperative Credit Associations Act applies or a cooperative credit society incorporated and regulated by or under an Act of the legislature of a province. (société coopérative de crédit)

"Crown Corporation" means a Crown corporation that is an agent of Her Majesty in right of Canada in respect of which employment has not been excepted from included employment by a regulation made under subsection 4(6) of the Act. (société d'État)

"default" means the occurrence of one of the following events:

(a) the written notification to the Superintendent that the administrator intends to terminate or wind up the whole plan under subsection 29(5) of the Act;

(b) the amendment of the plan, resolution by the employer or coming into force of any other measure that effects the termination of the whole plan;

(c) the Superintendent's declaration under subsection 29(2) of the Act that terminates the whole plan;

(d) the filing of any application or petition by the employer, or against the employer, under the Companies' Creditors Arrangement Act, the Bankruptcy and Insolvency Act or the Winding-up and Restructuring Act;

(e) the non-renewal of the letter of credit set out in Part 3 unless

(i) it has been replaced at least 30 days before the beginning of the following plan year,

(ii) an amount equal to the face amount of the letter of credit has been remitted to the pension fund at least 30 days before the beginning of the following plan year, or

(iii) the conditions set out in section 20 are complied with;

(f) the aggregate face amount of all of the letters of credit obtained in accordance with Part 3 is less than the amount set out in subsection 18(2) unless

(i) an amount equal to the difference between the amount set out in that subsection and the aggregate face amount of all of the letters of credit has been remitted to the pension fund at least 30 days before the beginning of the following plan year, or

(ii) there has been a reduction in the face amount of one or more letters of credit in accordance with section 24; or

(g) the termination of the whole plan. (défaut)

"holder" means a trust company that is licensed to carry on business in Canada, that is at arm's length, within the meaning of the Income Tax Act, from the issuer and that has entered into a trust agreement with the employer or, if the employer is not the administrator, with the employer and administrator. (détenteur)

"initial solvency deficiency" means the solvency deficiency of a plan that emerges on the date on which the valuation that identified the deficiency was performed, as reported in the first actuarial report filed after the coming into force of these Regulations, and that values the plan as of a date that is later than December 30, 2005 and before January 2, 2008. (déficit initial de solvabilité).

"issuer" means a bank or cooperative credit society that has an acceptable rating at the date of the issuance or renewal of a letter of credit and that is not the employer or affiliated with the employer within the meaning of subsection 2(2) of the Canada Business Corporations Act. (émetteur)

"special payment" means a payment or one of a series of payments that is determined in accordance with section 9 of the Pension Benefits Standards Regulations, 1985 or sections 5, 6, 7 or 18 of these Regulations. (paiement spécial)

 (2) Except as otherwise provided, expressions used in these Regulations have the same meaning as in the Pension Benefits Standards Regulations, 1985.

Application

 2. (1) These Regulations apply to the funding of a defined benefit plan and, except as otherwise provided in these Regulations, the Pension Benefits Standards Regulations, 1985 shall also apply to the funding of a plan under these Regulations.

 (2) For the purposes of these Regulations, an initial solvency deficiency shall be calculated in accordance with the definition of "solvency deficiency" in subsection 9(1) of the Pension Benefits Standards Regulations, 1985, except that the present value of any special payment referred to in paragraph (d) of that definition calculated in respect of the funding of a solvency deficiency that emerged prior to the emergence of the initial solvency deficiency shall be zero.

 (3) For the purpose of these Regulations, any special payment that would have been required to be made under subsection 9(4) of the Pension Benefits Standards Regulations, 1985 with respect to the funding of a solvency deficiency that emerged prior to the emergence of the initial solvency deficiency is not required to be made.

 (4) In case of an inconsistency between these Regulations and the Pension Benefits Standards Regulations, 1985, these Regulations shall prevail.

 3. These Regulations do not apply to

(a) a plan that was established after December 31, 2005; or

(b) a plan to which the Air Canada Pension Plan Solvency Deficiency Funding Regulations apply.

 4. (1) Only plans to which all payments owed to the pension fund prior to the day on which the initial solvency deficiency emerges, as required by subsection 9(14) of the Pension Benefits Standards Regulations, 1985, have been made to the pension fund as of the filing date of the actuarial report that shows the emergence of the initial solvency deficiency may be funded in accordance with these Regulations.

 (2) Despite section 8 of the Pension Benefits Standards Regulations, 1985, the funding of a plan shall be considered to meet the standards for solvency if the funding is in accordance with Part 1, 2 or 3 of these Regulations.


Part 1
New Five-Year Funding

General Funding Rules

 5. (1) Despite subsection 9(4) of the Pension Benefits Standards Regulations, 1985, an initial solvency deficiency of a plan may be funded by special payments sufficient to liquidate the initial solvency deficiency by equal annual payments over a period not exceeding five years from the day on which the deficiency emerged.

 (2) If the initial solvency deficiency is funded in accordance with this Part, the administrator of the plan shall notify the Superintendent in writing at the time of filing of the first actuarial report after the coming into force of these Regulations.

 (3) When a solvency deficiency emerges after the day on which the initial solvency deficiency emerged, the new solvency deficiency shall be calculated, for the purposes of subsection 9(4) of the Pension Benefits Standards Regulations, 1985, in accordance with the definition of "solvency deficiency" in subsection 9(1) of those Regulations which shall be interpreted as including the present value of the special payments referred to in subsection (1) as an asset.


Part 2
New 10-year Funding

General Funding Rules

 6. (1) Despite subsection 9(4) of the Pension Benefits Standards Regulations, 1985, an initial solvency deficiency of a plan may be funded in accordance with Part 1, but the remittance to the pension fund of a portion of the special payments determined under Part 1 may be deferred as if the initial solvency deficiency were funded by special payments sufficient to liquidate the initial solvency deficiency by equal annual payments over a period not exceeding 10 years from the day on which the deficiency emerged.

 (2) The initial solvency deficiency may be funded under this Part if

(a) less than one third of the members object; and

(b) less than one third of the former members and other persons included in the definition of "beneficiary" in subsection 1(1) object.

 (3) Despite the fact that special payments set out in subsection (1) may be made over a period that exceeds the period applicable under Part 1, for the purposes of subsection 8(1) of the Act, the amount by which the aggregate amount of special payments that would have been remitted to the pension fund in accordance with Part 1 from the day on which the initial solvency deficiency emerged, as adjusted to take into account the actuarial gains that were applied under paragraph 9(9)(a) of the Pension Benefits Standards Regulations, 1985, plus interest, exceeds the aggregate amount of special payments paid or remitted to the pension fund in accordance with this Part, plus interest, shall be considered to be an amount accrued to the pension fund from the employer.

 (4) Interest shall be calculated by using the interest rate that was assumed in valuing the liabilities of the plan for the purpose of calculating the initial solvency deficiency.

Multi-employer Pension Plan

 7. (1) Despite subsection 9(4) of the Pension Benefits Standards Regulations, 1985 and section 6 of these Regulations, an initial solvency deficiency of a multi-employer pension plan may be funded by special payments sufficient to liquidate the initial solvency deficiency by equal annual payments over a period not exceeding 10 years from the day on which the deficiency emerged.

 (2) If the funding is for an initial solvency deficiency of a multi-employer pension plan and if the annual amount required to be remitted to the pension fund under subsection (1) is less than the aggregate amount of payments that are required to be made or remitted to the pension fund, excluding normal cost and special payments required to liquidate an initial unfunded liability, under all applicable collective agreements, the amount required to be remitted to the pension fund in accordance with this Part shall be the aggregate amounts required to be paid or remitted to the pension fund pursuant to all collective agreements.

 (3) The initial solvency deficiency may be funded under this Part if

(a) less than one third of the members object; and

(b) less than one third of the former members and other persons included in the definition of "beneficiary" in subsection 1(1) object.

Information To Be Provided to Beneficiaries

 8. (1) Subject to subsection (2), the administrator shall provide to the beneficiaries the following information:

(a) the solvency ratio of the plan as of the day on which the initial solvency deficiency emerged;

(b) the amount of the initial solvency deficiency;

(c) a description of how the pension benefits would be allocated and distributed if the plan were to fully terminate on the day on which the initial solvency deficiency emerged;

(d) a statement indicating that extending the period for funding the initial solvency deficiency as permitted by this Part may result in a lower value of plan assets during the funding period than would be the case if the deficiency were funded over a period not exceeding five years and that the longer funding period may also extend the period during which plan assets are less than plan liabilities;

(e) the special payments and normal cost of the plan that would have been made during the first plan year covered by the actuarial report referred to in paragraph 9(a) if the initial solvency deficiency were to be funded under Part 1;

(f) the special payments and normal cost of the plan that will be made during the first plan year covered by the actuarial report referred to in paragraph 9(a) if the initial solvency deficiency is funded in accordance with this Part;

(g) a statement indicating that an actuarial report will be filed at least annually with the Superintendent while the plan is being funded in accordance with this Part;

(h) a statement indicating that the plan may be funded under this Part only if less than one third of the members object and less than one third of the former members and other persons included in the definition of "beneficiary" in subsection 1(1) object;

(i) a statement indicating that the Superintendent's approval is not required to fund the deficiency in accordance with this Part;

(j) a statement indicating that in order to register their disagreement with the proposal to fund in accordance with this Part, an objection must be sent to the administrator at the address and by the date indicated on the notice, that date being one that is not less than 21 days after the provision of the information under this section;

(k) a statement indicating that if the plan is funded in accordance with this Part, amendments to the plan that increase the pension benefits will be restricted for the first five years; and

(l) a statement setting out the right to access the documents described in paragraph 28(1)(c) of the Act.

 (2) If a beneficiary is represented by a beneficiary representative, the administrator shall provide the information set out in subsection (1) to the beneficiary representative.

Documents and Information To Be Filed with Superintendent

 9. The administrator shall file the following documents and information with the Superintendent:

(a) the actuarial report valuing the plan as of the day on which the initial solvency deficiency emerged;

(b) other than in the case of a multi-employer pension plan, a written statement confirming that a resolution of the board of directors of the employer has been passed, if the employer is a corporation, or, if the employer is not a corporation, an approval of the directors or members of that other body who have the authority to direct or authorize the actions of that body, has been given, authorizing the funding payment schedule calculated in accordance with this Part;

(c) in the case of a multi-employer pension plan, written notification that the initial solvency deficiency is to be funded in accordance with this Part; and

(d) a written statement confirming that the information set out in section 8 has been provided to the beneficiaries or to the beneficiary representatives and that less than one third of the members have objected and less than one third of the former members and other persons included in the definition of "beneficiary" in subsection 1(1) have objected.

Prescribed Solvency Ratio

 10. For the purposes of paragraph 10.1(2)(b) of the Act, the prescribed solvency ratio level for the first five plan years of funding in accordance with this Part is the solvency ratio calculated on the basis of the most recent actuarial report filed with the Superintendent in accordance with subsection 12(3) of the Act.

New Solvency Deficiency

 11. When a solvency deficiency emerges after the day on which the initial solvency deficiency emerged, the new solvency deficiency shall be calculated, for the purposes of subsection 9(4) of the Pension Benefits Standards Regulations, 1985, in accordance with the definition of "solvency deficiency" in subsection 9(1) of those Regulations which shall be interpreted as including the present value of the special payments referred to in section 6 or 7 as an asset.

Termination of Plan

 12. If a plan is fully terminated and on the day of its termination the liabilities of the plan exceed its assets, the lesser of the amount determined in subsection 6(3) and the amount by which the liabilities of the plan exceed its assets shall immediately be remitted to the pension fund.

Ceasing 10-Year Funding

 13. (1) A plan may cease being funded under this Part, beginning on the first day of a plan year, by giving written notice to the Superintendent not later than six months after the beginning of that plan year.

 (2) The notice shall indicate whether or not the plan has a surplus as of the first day of the plan year in which the funding ceases.

 (3) If funding ceases, section 9 of the Pension Benefits Standards Regulations, 1985 applies in respect of the plan except as otherwise provided in this Part.

Calculating Surplus

 14. A surplus in respect of a plan shall be determined in the manner prescribed by subsection 16(1) of the Pension Benefits Standards Regulations, 1985 as if the plan had been fully terminated.

Plan with Surplus

 15. If funding ceases in respect of a plan that has a surplus as of the first day of the plan year, this Part ceases to apply on the first day of that plan year.

Plan Without Surplus

 16. (1) If funding ceases in respect of a plan that does not have a surplus as of the first day of the plan year, section 9 of the Pension Benefits Standards Regulations, 1985 applies except as follows:

(a) in the case where funding ceases before the sixth plan year,

(i) the administrator shall have an actuarial report prepared C in which the present value of the special payments referred to in section 6 or 7 shall be zero C valuing the plan as of the first day of the plan year in which funding ceases,

(ii) the amount by which the aggregate amount of special payments that would have been remitted to the pension fund in accordance with Part 1 from the day on which the initial solvency deficiency emerged to the day on which funding ceases, as adjusted to take into account the actuarial gains that were applied under paragraph 9(9)(a) of the Pension Benefits Standards Regulations, 1985, plus interest, exceeds the aggregate amount of special payments paid or remitted to the pension fund in accordance with this Part, plus interest, shall immediately be remitted to the pension fund,

(iii) any remaining initial solvency deficiency disclosed by the actuarial report, which shall be calculated by including the amount remitted in accordance with subparagraph (ii) as an asset of the pension fund, shall be considered to have emerged as of the day on which the initial solvency deficiency emerged,

(iv) the remaining initial solvency deficiency calculated under subparagraph (iii) shall be funded by special payments sufficient to liquidate that solvency deficiency by equal annual payments over a period not exceeding five years minus the number of years that the plan was funded in accordance with this Part, and

(v) the special payments in section 6 or 7 shall continue to be made until the first special payment required to fund the remaining initial solvency deficiency referred to in paragraph (iii) is remitted to the pension fund; and

(b) in the case where funding ceases after the fifth plan year,

(i) the administrator shall have an actuarial report prepared as of the first day of the plan year in which funding ceases, and

(ii) the amount by which the aggregate amount of special payments that would have been remitted to the pension fund in accordance with Part 1 from the day on which the initial solvency deficiency emerged to the day on which funding ceases, as adjusted to take into account the actuarial gains that were applied under paragraph 9(9)(a) of the Pension Benefits Standards Regulations, 1985, plus interest, exceeds the aggregate amount of special payments paid or remitted to the pension fund in accordance with this Part, plus interest, shall immediately be remitted to the pension fund.

 (2) Interest shall be calculated by using the interest rate that was assumed in valuing the liabilities of the plan for the purpose of calculating the initial solvency deficiency.

Crown Corporations

 17. (1) The administrator of a plan of a Crown Corporation with an initial solvency deficiency that is funded in accordance with this Part shall not have to comply with sections 8 and 9 if the administrator files the following documents and information with the Superintendent:

(a) the actuarial report valuing the plan as of the day on which the initial solvency deficiency emerged;

(b) a written statement confirming that a resolution of the board of directors of the Crown Corporation has been passed authorizing the funding payment schedule calculated in accordance with this Part;

(c) a written statement confirming that the board of directors of the Crown Corporation has notified the Minister of the decision to fund the initial solvency deficiency in accordance with this Part; and

(d) a copy of a letter from the Minister acknowledging that the Crown Corporation intends to fund the initial solvency deficiency in accordance with this Part.

 (2) When the administrator provides the written statement under paragraph 28(1)(b) of the Act, the administrator shall also provide the amount of the initial solvency deficiency and the fact that the deficiency is being funded in compliance with this Part by equal annual payments over a period not exceeding 10 years.

 (3) Section 10 shall not apply in respect of a plan if the documents and information set out in subsection (1) is filed.


Part 3
10-year Funding With Letters of Credit

General Funding Rules

 18. (1) Despite subsection 9(4) of the Pension Benefits Standards Regulations, 1985, an initial solvency deficiency of a plan may be funded by special payments sufficient to liquidate the initial solvency deficiency by equal annual payments over a period not exceeding 10 years from the day on which the deficiency emerged.

 (2) The initial solvency deficiency may be funded under this Part if the employer

 (a) obtains letters of credit in each of the first five plan years of funding under this Part, for the amount representing the difference between the present value, at the end of each plan year, of the remaining special payments under this Part and the present value of the remaining special payments that would have been required to be made to liquidate the initial solvency deficiency as if it had been funded under Part 1; and

 (b) maintains letters of credit for the sixth plan year of funding and each of the following plan years, for the amount representing the present value at the beginning of each plan year of the remaining special payments under this Part.

 (3) The present value of the remaining special payments shall be determined by using the same interest rate that is used to determine the initial solvency deficiency.

 (4) The administrator shall notify the Superintendent in writing that it intends to fund the initial solvency deficiency in accordance with this Part.

Letter of Credit

 19. (1) A letter of credit required by this Part shall be an irrevocable, unconditional standby letter of credit that

(a) is in accordance with the rules of International Standby Practices, 1998 (publication No. 590 of the International Chamber of Commerce);

(b) is issued or confirmed by an issuer who is a member of the Canadian Payments Association that has been assigned an acceptable rating; and

(c) provides that

(i) the letter of credit is made out to the benefit of the holder,

(ii) the issuer will pay the face amount of the letter of credit on demand from the holder without inquiring whether the holder has a right to make the demand,

(iii) the bankruptcy of the employer shall have no effect on the rights and obligations of the issuer and the holder set out in the letter of credit,

(iv) the letter of credit will expire on the plan's year end, and

(v) the letter of credit will automatically renew for further one-year periods on the expiry date referred to in subparagraph (iv) unless the issuer notifies the holder in writing of the non-renewal not less than 90 days before the expiry date.

 (2) A letter of credit shall be obtained by not later than the day on which the actuarial report is filed with the Superintendent, for the first plan year of funding, and at least 30 days before the beginning of each subsequent plan year that is covered by it.

 (3) The letter of credit shall immediately be provided to the holder.

 20. (1) If separate letters of credit have been obtained for each plan year, a letter of credit is not required to be automatically renewed after the sixth year following the plan year for which it was obtained.

 (2) A letter of credit is not required to be automatically renewed if an actuarial report that has been filed with the Superintendent in accordance with subsection 12(3) of the Act shows that the initial solvency deficiency has been completely liquidated.

Trust Agreement

 21. (1) The employer and, if the employer is not the administrator of the plan, the administrator shall enter into a trust agreement with the holder regarding the letters of credit set out in this Part.

 (2) The trust agreement shall provide that

(a) the holder shall hold the letter of credit in Canada in trust for the plan;

(b) the definition of "default" as set out in these Regulations applies to the agreement;

(c) the employer shall immediately notify the holder and the Superintendent and, if the employer is not the administrator of the plan, the administrator, in writing of a default;

(d) the administrator shall notify the holder and the Superintendent in writing of a default immediately after becoming aware of the default;

(e) on becoming aware of a default, the holder shall immediately make a demand for payment of the face amount of all letters of credit from the issuer and shall notify the employer and Superintendent that it has made the demand;

(f) the holder shall not make a demand for payment if the letter of credit is expiring without being renewed, or the face amount is being reduced, in accordance with this Part; and

(g) the administrator shall notify the holder of any circumstance when the letter of credit may expire, or when the face amount of the letter of credit may be reduced, in accordance with this Part.

Documents and Information To Be Filed with Superintendent

 22. (1) The administrator shall file the following documents and information with the Superintendent for the first plan year of funding of the initial solvency deficiency:

(a) the actuarial report valuing the plan as of the day on which the initial solvency deficiency emerged;

(b) a written statement confirming that a resolution of the board of directors of the employer has been passed, if the employer is a corporation, or, if the employer is not a corporation, an approval of the directors or members of that other body who have the authority to direct or authorize the actions of that body, has been given, authorizing the funding payment schedule calculated in accordance with this Part;

(c) a copy of all letters of credit in effect for the plan year; and

(d) a written statement from the administrator that the letters of credit comply with this Part;

(e) a copy of the trust agreement set out in section 21 together with the name and address of the holder of the letters of credit.

 (2) For each subsequent plan year of funding, the administrator shall file with the Superintendent copies of all subsequent letters of credit that have been obtained by the employer and a written statement, for each letter of credit filed, that it complies with this Part.

Statement to Members

 23. When the administrator provides the written statement under paragraph 28(1)(b) of the Act, the administrator shall also provide the following information:

(a) the amount of the initial solvency deficiency;

(b) the fact that the deficiency is being funded in compliance with this Part by equal annual payments over a period not exceeding 10 years; and

(c) the aggregate face amount of all letters of credit being held by the holder.

Reduction of Face Amount of Letter of Credit

 24. (1) The face amount of a letter of credit may be reduced by

(a) the amount by which the amount that the employer has remitted or paid to the pension fund in a particular plan year exceeds the total of the required special payments and the normal cost of the plan for that year; or

(b) the amount by which the aggregate face amount exceeds the amount set out in subsection 18(2).

 (2) Subject to subsection (3), the reduction of the face amount of the letter of credit may only be made within 60 days before the beginning of the following plan year.

 (3) If an event described in paragraph (a),(b), (c) or (g) of the definition of "default" in subsection 1(1) occurs, the face amount of a letter of credit shall not be reduced until the Superintendent has approved the report required under subsection 29(9) of the Act.

New Solvency Deficiency

 25. When a solvency deficiency emerges after the day on which the initial solvency deficiency emerged, the new solvency deficiency shall be calculated, for the purposes of subsection 9(4) of the Pension Benefits Standards Regulations, 1985, in accordance with the definition of "solvency deficiency" in subsection 9(1) of the Pension Benefits Standards Regulations, 1985, which shall be interpreted as including the present value of the special payments referred to in section 18 as an asset.

Failure to Pay Letter of Credit

 26. If the issuer does not pay the face amount of a letter of credit after a demand for payment has been made, the employer shall remit to the pension fund within 30 days after the demand for payment an amount equal to the face amount of that letter of credit.

Occurrence of Default

 27. (1) If a default occurs, an amount equal to the total face amount of all of the letters of credit shall, for the purposes of subsection 8(1) of the Act, be considered as an amount accrued to the pension fund.

 (2) Except if a plan is fully terminated, the administrator shall have an actuarial report prepared - in which the present value of the special payments referred to in subsection 18(1) shall be zero - valuing the plan as of the last day of the plan year in which the default occurs and shall file a copy of the report with the Superintendent in accordance with subsection 12(3) of the Act.

 (3) Any remaining initial solvency deficiency identified in the actuarial report prepared in accordance with subsection (2), which shall be calculated by including the face amount of the letters of credit remitted to the pension fund as an asset, shall be considered to have emerged as of the day the initial solvency deficiency emerged.

 (4) Any remaining initial solvency deficiency identified in the actuarial report prepared in accordance with subsection (2) shall be funded by special payments sufficient to liquidate the initial solvency deficiency by equal annual payments over a period not exceeding five years minus the number of years the plan was funded in accordance with this Part.

Ceasing 10-Year Funding

 28. A plan may cease being funded under this Part, beginning on the first day of a plan year, if

(a) the administrator gives written notice to the Superintendent not later than six months after the beginning of that plan year;

(b) an amount equal to the face amount of all letters of credit held at that time is remitted to the pension fund; and

(c) any remaining initial solvency deficiency is calculated and funded in accordance with subsections 27 (2) to (4) as if a default occurred, except that the actuarial report shall be prepared valuing the plan as of the first day of the plan year in which funding ceases.

Cease to be in force

 29. These Regulations cease to be in force on February 1, 2019.

Coming into force

 30. These Regulations come into force on the day on which they are registered.


a S.C. 1998, c. 12, s. 1(4)  [Return]

b S.C. 1998, c. 12, s. 10  [Return]

c S.C. 2000, c. 12, par. 263(d)  [Return]

d S.C. 2001, c. 34, s. 76  [Return]

e R.S., c. 32 (2nd Supp.)  [Return]

f S.C. 1998, c. 12, s. 1(4)  [Return]

g S.C. 1998, c. 12, s. 10  [Return]

h S.C. 2000, c. 12, par. 263(d)  [Return]

i S.C. 2001, c. 34, s. 76  [Return]

j R.S., c. 32 (2nd Supp.)  [Return]


- News Release 2006-020 -