Solvency Funding Relief Regulations (SOR/2006-275)

Regulations are current to 2014-06-12 and last amended on 2011-04-01. Previous Versions

Failure to Pay Letter of Credit

 On receipt of the notice from a holder that an issuer has not paid the face amount of a letter of credit after a demand for payment has been made, the employer shall remit to the pension fund no later than 30 days after the day on which the demand for payment was made, an amount equal to the face amount of that letter of credit.

Occurrence of Default

  •  (1) If a default occurs, 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 reductions in special payments resulting from the application of the Pension Benefits Standards Regulations, 1985, plus interest, exceeds the aggregate amount of special payments made to the pension fund in accordance with this Part, plus interest, shall immediately be remitted 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 19(1) shall be zero — valuing the plan as at the last day of the plan year in which the default occurs.

  • (3) Any remaining initial solvency deficiency disclosed by the actuarial report prepared in accordance with subsection (2) shall be calculated by including as an asset any amount remitted to the pension fund in accordance with subsection (1) and the remaining initial solvency deficiency shall be considered to have emerged as of the day on which the initial solvency deficiency emerged.

  • (4) The remaining initial solvency deficiency calculated under subsection (3) shall be funded by special payments sufficient to liquidate that initial 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.

  • SOR/2010-149, s. 15;
  • SOR/2011-85, s. 21.

Ceasing 10-year Funding

  •  (1) A plan may cease to be funded in accordance with 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) 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 reductions in special payments resulting from the application of the Pension Benefits Standards Regulations, 1985, plus interest, exceeds the aggregate amount of special payments made to the pension fund in accordance with this Part, plus interest, shall be remitted to the pension fund at least 30 days before the plan’s year end; and

    • (c) an actuarial report is prepared in accordance with subsection 29(2) and any remaining initial solvency deficiency is calculated and funded in accordance with subsections 29(3) and (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.

  • (2) Paragraphs (1)(b) and (c) do not apply if the face amount of the letters of credit obtained to fund the plan under this Part is included as a solvency asset as defined in subsection 2(1) of the Pension Benefit Standards Regulations, 1985.

  • SOR/2010-149, s. 16;
  • SOR/2011-85, s. 22.