Pension Benefits Standards Act, 1985 (R.S.C., 1985, c. 32 (2nd Supp.))

Act current to 2018-10-24 and last amended on 2017-12-12. Previous Versions

Funding and Surplus (continued)

Required Funding (continued)

Marginal note:Notification of remittance

  •  (1) The administrator of a pension plan must notify in writing the trustee or custodian of the pension fund of all amounts that are to be remitted to the pension fund and the expected date of the remittance.

  • Marginal note:Effect of late remittance

    (2) If a payment to a pension fund is not remitted within 30 days after the date referred to in subsection (1),

    • (a) the administrator of the pension plan must immediately notify the Superintendent; and

    • (b) a trustee or custodian of the pension fund must, if the administrator is the employer, immediately notify the Superintendent.

  • Marginal note:Content

    (3) The Superintendent may direct the form and content of any notice referred to in subsection (2) as well as the manner of providing that notice.

  • 1998, c. 12, s. 9;
  • 2010, c. 25, s. 184.

Letters of Credit

Marginal note:Letters of credit

  •  (1) Subject to the regulations, an employer may provide a trustee with, or transfer to a trust, a letter of credit made out to the trustee for the benefit of the pension plan, instead of paying into the pension fund an amount that is required to be paid under subsection 9(1.1).

  • Marginal note:Copy to administrator

    (2) As soon as feasible after the letter of credit is issued, the employer must provide the administrator with a copy of it.

  • Marginal note:Deductions from remuneration

    (3) The employer may not obtain a letter of credit in respect of an amount that it has deducted from members’ remuneration.

  • Marginal note:Non-application

    (4) Subsection (1) does not apply in respect of a pension plan that has been terminated in whole.

  • 2010, c. 12, s. 1795.

Marginal note:Duty of employer

 The employer must ensure that the letter of credit and the trust agreement comply with this Act and the regulations and must, at any intervals or times and in the form that the Superintendent directs, provide the Superintendent and the administrator with a written statement confirming that compliance.

  • 2010, c. 12, s. 1795.

Marginal note:Obligation of trustee

  •  (1) The trustee must hold the letter of credit in trust for the pension plan.

  • Marginal note:Disclosure

    (2) The trustee must file with the Superintendent any information in respect of a letter of credit that the Superintendent requires at any intervals or times that the Superintendent directs.

  • Marginal note:No liability

    (3) No civil action lies against the trustee for having, in good faith and in accordance with the regulations, on the direction of the employer, allowed the letter of credit to be cancelled or its face value to be reduced.

  • 2010, c. 12, s. 1795.

Marginal note:Demand for payment

  •  (1) In the prescribed circumstances, the trustee must make a demand to the issuer for payment into the pension fund of an amount equal to the face value of the letter of credit.

  • Marginal note:Payment by employer

    (2) If the issuer fails to honour the letter of credit, the employer must pay an amount equal to its face value into the pension fund without delay.

  • Marginal note:Non-application of subsection 8(1)

    (3) Subsection 8(1) does not apply to an amount in respect of which the employer has obtained a letter of credit unless the issuer fails to honour the letter of credit.

  • Marginal note:Bankruptcy, etc., of employer

    (4) In the event of any liquidation, assignment or bankruptcy of the employer, an amount equal to the amount of a letter of credit that has not been honoured by the issuer is deemed to be separate from and form no part of the estate in liquidation, assignment or bankruptcy.

  • 2010, c. 12, s. 1795.

Marginal note:Costs

 The costs that are associated with obtaining, holding, amending or cancelling a letter of credit may not be paid out of the pension fund.

  • 2010, c. 12, s. 1795.

Crown Corporations

Marginal note:Reduction of payments

 If the employer is a Crown corporation, a payment that it is required to make under subsection 9(1.1) may be reduced, provided the payment does not relate to any amount that the employer has deducted from members’ remuneration and the prescribed conditions have been met.

  • 2010, c. 12, s. 1795.

Surplus

Marginal note:Refund of surplus to the employer

  •  (1) If an actuarial report prepared by a designated actuary or filed under subsection 12(2) indicates that there is a surplus, no part of that surplus may be refunded to the employer unless

    • (a) the employer establishes that

      • (i) it is entitled to the surplus, or part of it, under the pension plan, or

      • (ii) it has a claim to the surplus, or part of it, under this section;

    • (b) the requirements of the regulations made under paragraph 39(1)(h.1) are met; and

    • (c) the Superintendent consents to the refund.

  • Marginal note:Consent to surplus

    (2) In deciding whether to consent to a refund, the Superintendent shall recognize the claim of the employer to the surplus, or part of it, established under this section.

  • Marginal note:Claim to surplus

    (3) An employer has a claim to the surplus, or part of it, if, after being notified of the employer’s proposal for a refund of that surplus or part of it, at least two thirds of the persons in each of the following categories notify the employer that they consent to the proposal:

    • (a) members of the pension plan; and

    • (b) former members of the plan and any other persons within a prescribed class.

  • Marginal note:Submission to arbitration

    (4) Subject to subsection (5), if more than one half but fewer than two thirds of the persons in each of the categories referred to in subsection (3) consented to the proposal, the employer may, or if the whole of the pension plan is terminated shall, submit the proposal to arbitration. The employer shall notify the Superintendent, in the form and manner, if any, that the Superintendent directs, and the persons in those categories if the proposal is to be submitted to arbitration.

  • Marginal note:Liquidation of employer

    (5) The employer’s claim to the surplus, or part of it, shall be submitted to arbitration within 18 months after the termination of the whole of the pension plan, or any longer period specified by the Superintendent, if

    • (a) the employer has not established a claim to the surplus; and

    • (b) the employer is in the process of being liquidated.

    The employer shall notify the Superintendent, in the form and manner, if any, that the Superintendent directs, and the persons in the categories referred to in subsection (3) that the claim is to be submitted to arbitration.

  • Marginal note:Deemed agreement

    (6) If a proposal or claim is submitted to arbitration, the employer and all interested persons are deemed to have agreed to have the employer’s claim determined by the arbitration.

  • Marginal note:Choice of arbitrator

    (7) The arbitrator shall be chosen by the employer and the persons in the categories set out in subsection (3). If they cannot agree on an arbitrator within the prescribed period, the Superintendent shall choose the arbitrator.

  • Marginal note:Arbitration

    (8) The arbitrator is not bound by any legal or technical rules of evidence in conducting any matter that comes before the arbitrator, and shall deal with it as informally and expeditiously as the circumstances and considerations of fairness and natural justice permit.

  • Marginal note:Retention of experts

    (9) An arbitrator may retain any experts that the arbitrator considers necessary.

  • Marginal note:Costs of arbitration

    (10) Subject to the provisions of the pension plan, the parties to an arbitration shall pay its costs in the amount, subject to the approval of the Superintendent, and in the proportion that the arbitrator determines.

  • Marginal note:Issuance of decision

    (11) The arbitrator shall issue a written decision with reasons, file them with the Superintendent within ten days after issuing them and make them available for inspection by any interested person.

  • Marginal note:Scheme of division

    (12) In respect of a claim submitted to arbitration under subsection (5), the arbitrator may impose a scheme of division of the surplus, or of part of it, between the parties to the arbitration.

  • Marginal note:Decision binding

    (13) An arbitrator’s decision is final and binding on the parties and on any other person affected by it.

  • Marginal note:Notification to unions

    (14) All notifications to unionized members under this section must also be made to the executive of their union.

  • Marginal note:Union represents members

    (15) Unless otherwise provided by the relevant collective agreement, the executive of a union shall represent its members, other than former members of the plan, for the purposes of this section.

  • 1998, c. 12, s. 9;
  • 2001, c. 34, s. 67(F);
  • 2010, c. 12, s. 1796, c. 25, s. 185.
 
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