Pension Protection Act (S.C. 2023, c. 6)
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Assented to 2023-04-27
Pension Protection Act
S.C. 2023, c. 6
Assented to 2023-04-27
An Act to amend the Bankruptcy and Insolvency Act, the Companies’ Creditors Arrangement Act and the Pension Benefits Standards Act, 1985
SUMMARY
This enactment amends the Bankruptcy and Insolvency Act and the Companies’ Creditors Arrangement Act to ensure that claims in respect of unfunded liabilities or solvency deficiencies of pension plans and claims relating to the cessation of an employer’s participation in group insurance plans are paid in priority in the event of bankruptcy proceedings.
It also amends the Pension Benefits Standards Act, 1985 to provide for the tabling of an annual report respecting the solvency of pension plans.
His Majesty, by and with the advice and consent of the Senate and House of Commons of Canada, enacts as follows:
Short Title
Marginal note:Short title
1 This Act may be cited as the Pension Protection Act.
R.S., c. B-3; 1992, c. 27, s. 2Bankruptcy and Insolvency Act
2 (1) Subparagraph 60(1.5)(a)(ii) of the Bankruptcy and Insolvency Act is amended by adding the following after clause (A):
(A.1) an amount equal to the sum of all special payments, determined in accordance with section 9 of the Pension Benefits Standards Regulations, 1985, that were required to be paid by the employer to the fund referred to in sections 81.5 and 81.6 to liquidate an unfunded liability or a solvency deficiency,
(A.2) any amount required to liquidate any other unfunded liability or solvency deficiency of the fund as determined at the time of the filing of the notice of intention or of the proposal, if no notice of intention was filed,
(2) Subparagraph 60(1.5)(a)(iii) of the Act is amended by adding the following after clause (A):
(A.1) an amount equal to the sum of all special payments, determined in accordance with section 9 of the Pension Benefits Standards Regulations, 1985, that would have been required to be paid by the employer to the fund referred to in sections 81.5 and 81.6 to liquidate an unfunded liability or a solvency deficiency if the prescribed plan were regulated by an Act of Parliament,
(A.2) any amount required to liquidate any other unfunded liability or solvency deficiency of the fund as determined at the time of the filing of the notice of intention or of the proposal, if no notice of intention was filed,
3 (1) Paragraph 81.5(1)(b) of the Act is amended by adding the following after subparagraph (i):
(i.1) an amount equal to the sum of all special payments, determined in accordance with section 9 of the Pension Benefits Standards Regulations, 1985, that were required to be paid by the employer to the fund referred to in this section and section 81.6 to liquidate an unfunded liability or a solvency deficiency,
(i.2) any amount required to liquidate any other unfunded liability or solvency deficiency of the fund,
(2) Paragraph 81.5(1)(c) of the Act is amended by adding the following after subparagraph (i):
(i.1) an amount equal to the sum of all special payments, determined in accordance with section 9 of the Pension Benefits Standards Regulations, 1985, that would have been required to be paid by the employer to the fund referred to in this section and section 81.6 to liquidate an unfunded liability or a solvency deficiency if the prescribed plan were regulated by an Act of Parliament,
(i.2) any amount required to liquidate any other unfunded liability or solvency deficiency of the fund,
4 (1) Paragraph 81.6(1)(b) of the Act is amended by adding the following after subparagraph (i):
(i.1) an amount equal to the sum of all special payments, determined in accordance with section 9 of the Pension Benefits Standards Regulations, 1985, that would be required to be paid by the employer to the fund referred to in section 81.5 and this section to liquidate an unfunded liability or a solvency deficiency,
(i.2) any amount required to liquidate any other unfunded liability or solvency deficiency of the fund,
(2) Paragraph 81.6(1)(c) of the Act is amended by adding the following after subparagraph (i):
(i.1) an amount equal to the sum of all special payments, determined in accordance with section 9 of the Pension Benefits Standards Regulations, 1985, that would have been required to be paid by the employer to the fund referred to in section 81.5 and this section to liquidate an unfunded liability or a solvency deficiency if the prescribed plan were regulated by an Act of Parliament,
(i.2) any amount required to liquidate any other unfunded liability or solvency deficiency of the fund,
R.S., c. C-36Companies’ Creditors Arrangement Act
5 (1) Subparagraph 6(6)(a)(ii) of the Companies’ Creditors Arrangement Act is amended by adding the following after clause (A):
(A.1) an amount equal to the sum of all special payments, determined in accordance with section 9 of the Pension Benefits Standards Regulations, 1985, that were required to be paid by the employer to the fund referred to in sections 81.5 and 81.6 of the Bankruptcy and Insolvency Act to liquidate an unfunded liability or a solvency deficiency,
(A.2) any amount required to liquidate any other unfunded liability or solvency deficiency of the fund as determined on the day on which proceedings commence under this Act,
(2) Subparagraph 6(6)(a)(iii) of the Act is amended by adding the following after clause (A):
(A.1) an amount equal to the sum of all special payments, determined in accordance with section 9 of the Pension Benefits Standards Regulations, 1985, that would have been required to be paid by the employer to the fund referred to in sections 81.5 and 81.6 of the Bankruptcy and Insolvency Act to liquidate an unfunded liability or a solvency deficiency if the prescribed plan were regulated by an Act of Parliament,
(A.2) any amount required to liquidate any other unfunded liability or solvency deficiency of the fund as determined on the day on which proceedings commence under this Act,
R.S., c. 32 (2nd Supp.)Pension Benefits Standards Act, 1985
6 Section 40 of the Pension Benefits Standards Act, 1985 is replaced by the following:
Marginal note:Annual report
40 (1) The Superintendent shall, after consultation with the Chief Actuary of the Office of the Superintendent of Financial Institutions and as soon as possible after the end of each fiscal year, submit to the Minister a report on
(a) the operation of this Act during that year; and
(b) the success of pension plans in meeting the funding requirements, determined in accordance with section 9, and the corrective measures taken or directed to be taken to deal with any pension plans that are not meeting the funding requirements.
Marginal note:Tabling in Parliament
(2) The Minister shall cause the report to be tabled in each House of Parliament on any of the first 15 days on which that House is sitting after the day the Minister receives it.
Marginal note:Transmission to provinces
(3) As soon as possible after the tabling of the report in Parliament, the Superintendent shall transmit the report to the relevant provincial ministers responsible for finance and provincial securities commissions.
Transitional Provisions
Marginal note:Exception — employers
7 (1) Sections 2 to 4 do not apply in respect of a person who is an employer and who, on the day before the day on which those sections come into force, participated in a prescribed pension plan for the benefit of the person’s employees until the fourth anniversary of the day on which this Act comes into force.
Marginal note:Exception — companies
(2) Subsections 5(1) and (2) do not apply in respect of a company that, on the day before the day on which those subsections come into force, participated in a prescribed pension plan for the benefit of its employees until the fourth anniversary of the day on which this Act comes into force.
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