Solvency Funding Relief Regulations (SOR/2006-275)

7. (1) Despite subsection 9(4) of the Pension Benefits Standards Regulations, 1985 and section 6 of these Regulations, and subject to subsection (2), 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 initial solvency deficiency emerged.

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

(3) The initial solvency deficiency may be funded in accordance with this Part only if less than one third of the members and less than one third of the beneficiaries excluding members object before the date indicated in the statement referred to in paragraph 8(1)(j).

(4) Any objection expressed by a beneficiary representative on behalf of the persons that they represent shall be counted as a separate objection for each person that they represent.

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

• (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 the extent to which the beneficiaries' benefits would be reduced if the plan were fully terminated and wound up with the solvency ratio referred to in paragraph (a);

• (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 the 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 the plan assets are less than the plan liabilities;

• (e) the special payments that would have been made during the first plan year covered by the actuarial report referred to in paragraph 10(b) if the initial solvency deficiency were to be funded in accordance with Part 1;

• (f) the special payments that are to be made during the first plan year covered by the actuarial report referred to in paragraph 10(b) if the initial solvency deficiency is funded in accordance with this Part;

• (g) a statement indicating that an actuarial report is to 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 in accordance with this Part only if less than one third of the members object and less than one third of the beneficiaries excluding members object;

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

• (j) a statement indicating that the beneficiaries may object to the proposal to fund the plan in accordance with this Part by sending an objection to the administrator at the address and by the date indicated in the statement, and that date shall not be less than 30 days after the day on which the other information required to be provided under this section is provided by the administrator;

• (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 plan years of funding in accordance with this Part; and

• (l) a statement setting out the right of access to 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.