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Pension Benefits Standards Regulations, 1985 (SOR/87-19)

Regulations are current to 2020-11-17 and last amended on 2017-06-23. Previous Versions

Investments (continued)

  •  (1) The administrator of a plan shall review and confirm or amend the statement of investment policies and procedures referred to in subsection 7.1(1) at least once each plan year.

  • (2) A copy of all amendments to the statement of investment policies and procedures shall be submitted, within 60 days after the statement is amended,

    • (a) to any pension council that has been established; and

    • (b) where the plan is a defined benefit plan, to the actuary to the plan.

  • SOR/93-299, s. 2
  • SOR/2002-78, s. 6

Member Choice Accounts

  •  (1) The administrator shall annually provide to any person who is permitted by a plan to make investment choices under subsection 8(4.2) of the Act a written statement that

    • (a) includes a description of each investment option available to the person that indicates

      • (i) its investment objective,

      • (ii) the type of investments and the degree of risk associated with it,

      • (iii) its 10 largest asset holdings based on market value, each expressed as a percentage of the total assets,

      • (iv) its performance history,

      • (v) that its past performance is not necessarily an indication of its future performance,

      • (vi) the benchmark that best reflects its composition,

      • (vii) the fees, levies and other charges associated with it that reduce return on investment expressed as a percentage or a fixed amount, and

      • (viii) its target asset allocation;

    • (b) includes a description of how the person’s funds are currently invested; and

    • (c) indicates any timing requirements that apply to the making of an investment choice.

  • SOR/2015-60, s. 3

Funding

 The funding of a plan shall be considered to meet the standards for solvency if the funding is in accordance with section 9.

  •  (1) In this section unfunded liability means

    • (a) the going concern deficit of a plan as determined on the date that the plan was established;

    • (b) the amount by which an increase in the going concern liabilities of a plan resulting from an amendment to the plan exceeds the going concern excess of the plan as determined on the day before the effective date of the amendment; or

    • (c) the amount by which the going concern deficit of a plan determined at the valuation date exceeds the present value of going concern special payments of the plan established in respect of periods after the valuation date.

  • (2) For the purposes of this section

    • (a) the date of emergence of an unfunded liability in respect of an occurrence described in

      • (i) paragraph (1)(a) is the effective date of the plan,

      • (ii) paragraph (1)(b) is the effective date of the amendment, and

      • (iii) paragraph (1)(c) is the valuation date;

    • (b) the date of emergence of a solvency deficiency is the date of the valuation that identified the deficiency; and

    • (c) the interest rate used to determine the present value of going concern special payments referred to in paragraph (1)(c) is the same as the interest rate used to determine the going concern liabilities of the plan at the valuation date.

  • (3) An unfunded liability of a plan shall be funded by going concern special payments sufficient to liquidate the unfunded liability by equal annual payments over a period of 15 years from the date on which the unfunded liability emerged.

  • (4) A plan shall be funded in each plan year as follows:

    • (a) by a contribution equal to the normal cost of the plan,

    • (b) by going concern special payments;

    • (c) if there is a solvency deficiency, by annual solvency special payments equal to the amount by which the solvency deficiency divided by 5 exceeds the amount of going concern special payments that are payable during the plan year;

    • (d) if there is an additional solvency deficiency referred to in subsection (12), by additional annual solvency special payments payable from the effective date of the amendment and equal to the amount by which the additional solvency deficiency divided by 5 exceeds the going concern special payment in respect of the unfunded liability emerging from the amendment to the plan; and

    • (e) by an amount required to be paid by an employer under a defined contribution provision.

  • (5) The amount required under paragraph (4)(a) or (e) may be reduced by all or a portion of the lesser of

    • (a) the going concern excess, and

    • (b) the amount by which the solvency assets exceed the solvency liabilities multiplied by 1.05.

  • (6) If an unfunded liability or solvency deficiency is liquidated at a rate greater than the sum of the special payments required under paragraph (4)(b),(c) or (d) by the making of an additional payment, the amount of a special payment for a subsequent plan year may be reduced if the outstanding balance of an unfunded liability will at no time be greater than it would have been had the going concern special payments referred to in paragraph (4)(b) been made.

  • (7) If the aggregate of the present value of going concern special payments referred to in paragraph (1)(c) exceeds the going concern deficit, this excess shall be applied to reduce the outstanding balance of any unfunded liability and the going concern special payments remaining to be made in respect of the unfunded liability shall be reduced pro rata.

  • (8) The average solvency ratio for a valuation date is the arithmetic average of the solvency ratios at the valuation date, the prior valuation date and the prior second valuation date adjusted as follows:

    • (a) the solvency ratio at the valuation date shall be adjusted to remove the effect of any amendment made after the prior second valuation date that retroactively increases or decreases the plan benefits;

    • (b) the solvency ratio at the prior valuation date shall be adjusted to remove the effect of any amendment made after the prior second valuation date and before the prior valuation date that retroactively increases or decreases the plan benefits;

    • (c) the solvency ratios at the prior valuation date and the prior second valuation date may be adjusted to increase the solvency assets by an amount not in excess of the present value of any special payment made in respect of the period between the prior valuation date and the valuation date, or in respect of the period between the prior second valuation date and the valuation date, as the case may be, but not including an additional payment referred to in subsection (6) that will be applied to reduce special payments in respect of periods after the valuation date;

    • (d) the solvency ratio at the valuation date shall be adjusted by reducing the solvency assets at the valuation date by the amount of an additional payment referred to in subsection (6) that will be applied to reduce special payments in respect of periods after the valuation date;

    • (d.1) the solvency ratios at the prior valuation date and the prior second valuation date shall be adjusted to increase the solvency assets by the face value of all letters of credit included in the solvency assets on the valuation date and to reduce the solvency assets by the face value of all letters of credit included in the solvency assets on the prior valuation date or prior second valuation date, as the case may be;

    • (e) the solvency ratios at the prior valuation date and the prior second valuation date shall be adjusted to reduce the solvency assets by the present value of any reduction made under subsection (5) or under subsection (7.1) as that subsection read immediately before this section comes into force, between the prior valuation date and the valuation date or between the prior second valuation date and the valuation date, as the case may be; and

    • (f) the solvency ratios at the prior valuation date and the prior second valuation date shall be adjusted to reflect the transfer into the plan of all of the assets of another plan between the prior valuation date and the valuation date or between the prior second valuation date and the valuation date, as the case may be, by including the assets of the transferring plan as solvency assets and the liabilities of the transferring plan as solvency liabilities.

  • (9) The average solvency ratio shall be adjusted to include the effect at the valuation date of any amendments referred to in paragraph (8)(a) or (b).

  • (10) The interest rate used to determine the present value of the special payments referred to in paragraphs (8)(c) and the present value of the reductions referred to in paragraph (8)(e) shall be the same interest rate that was used to determine the solvency liabilities of the plan on the prior valuation date or the prior second valuation date, as the case may be.

  • (11) The solvency ratio at the valuation date, without the adjustments made under subsection (8) or (9), may be used as the solvency ratio for a prior valuation date or prior second valuation date in respect of which no actuarial report was filed or provided to the Superintendent.

  • (12) An additional solvency deficiency resulting from an amendment to the plan is equal to the amount by which the increase in solvency liabilities determined in accordance with subsection (13) exceeds the solvency excess at the day before the effective date of the amendment.

  • (13) If an amendment to the plan increases the solvency liabilities, the increase in solvency liabilities shall be valued using the actuarial assumptions and methods used in the solvency valuation of the actuarial report for the most recently completed plan year before the effective date of the amendment.

  • (13.1) Subject to subsection (13.2), an employer, other than a participating employer under a multi-employer pension plan, may reduce the amount of any solvency special payment by the face value of a letter of credit that has been provided to a trustee or transferred to a trust under section 9.11 of the Act.

  • (13.2) An employer may not act under section 9.11 of the Act if the face value of all letters of credit provided to a trustee or transferred to a trust exceeds, or would exceed, 15% of the solvency liabilities of the plan as determined at the valuation date.

  • (13.3) For the purposes of section 9.16 of the Act, a payment that is required to be made under subsection 9(1.1) of the Act may be reduced if

    • (a) the payment is a solvency special payment;

    • (b) the Crown corporation meets the requirements of section 9.2;

    • (c) the aggregate amount of all reductions does not exceed or would not exceed 15% of the solvency liabilities of the plan as determined at the valuation date.

  • (13.4) The aggregate amount of all reductions made under section 9.16 of the Act may be adjusted in a plan year by subtracting the difference between

    • (a) the amount of the solvency special payment that would be payable for the plan year following the valuation date if no reductions were made under section 9.16 of the Act; and

    • (b) the amount of the solvency special payment that would have been required for the plan year following the valuation date if the solvency assets at the valuation date were increased by the aggregate amount of all reductions made under section 9.16 of the Act at the valuation date.

  • (13.5) The aggregate amount of all reductions made under section 9.16 of the Act may be adjusted to zero if, based on the most recent actuarial report,

    • (a) the solvency ratio of the plan is no less than 1.05; and

    • (b) the average solvency ratio of the plan is no less than 1.0.

  • (14) Payments to a plan shall be made as follows:

    • (a) the normal cost of the plan shall be paid in equal instalments or as a percentage of the anticipated remuneration to be paid to the members during the plan year and shall be paid not less frequently than monthly and not later than 30 days after the end of the period in respect of which the instalment is paid;

    • (b) any special payment to be made during the plan year shall be paid not less frequently than monthly and not later than 30 days after the end of the period in respect of which the instalment is paid;

    • (c) the contributions of plan members shall be remitted to the administrator not later than 30 days after the end of the period in respect of which such contributions were deducted;

    • (d) the administrator shall immediately pay into the fund any amount remitted to the administrator; and

    • (e) an amount required to be paid by an employer under a defined contribution provision shall be paid not less frequently than monthly and not later than 30 days after the end of the period in respect of which the amount is required to be paid.

  • SOR/94-384, s. 3
  • SOR/95-171, s. 6(E)
  • SOR/2002-78, s. 7
  • SOR/2010-149, s. 2
  • SOR/2011-85, s. 3
  • SOR/2017-145, s. 3
 
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