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Aveos Pension Plan Regulations (SOR/2013-132)

Regulations are current to 2022-11-16

Aveos Pension Plan Regulations

SOR/2013-132

PENSION BENEFITS STANDARDS ACT, 1985

Registration 2013-06-12

Aveos Pension Plan Regulations

P.C. 2013-798 2013-06-12

His Excellency the Governor General in Council, on the recommendation of the Minister of Finance, pursuant to section 39Footnote a of the Pension Benefits Standards Act, 1985Footnote b, makes the annexed Aveos Pension Plan Regulations.

Interpretation

Marginal note:Definitions

  •  (1) The following definitions apply in these Regulations.

    Act

    Act means the Pension Benefits Standards Act, 1985. (Loi)

    assets of the plan

    assets of the plan mean the assets of the plan that are attributable to a former member. (éléments d’actif du régime)

    former member

    former member means a former member of the plan who is in receipt of an immediate pension benefit. (ancien participant)

    life income fund

    life income fund means a registered retirement income fund, as defined in subsection 146.3(1) of the Income Tax Act, that meets the requirements set out in paragraph 2(1)(b). (fonds de revenu viager)

    locked-in registered retirement savings plan

    locked-in registered retirement savings plan means a registered retirement savings plan, as defined in subsection 146(1) of the Income Tax Act, that meets the requirements set out in paragraph 2(1)(a). (régime enregistré d’épargne-retraite immobilisée)

    plan

    plan means the pension plan in respect of which certificate of registration number 57573 has been issued by the Superintendent under the Act. (régime)

  • Marginal note:Interpretation

    (2) Except as otherwise provided in these Regulations, words and expressions used in these Regulations have the same meaning as in the Pension Benefits Standards Regulations, 1985.

Marginal note:Transfer options

  •  (1) Despite sections 18 and 36 of the Act, the administrator of the plan must, on request of a former member and with the consent of the spouse or common-law partner of the former member, if any, or on request of the survivor of the former member, transfer the assets of the plan to

    • (a) a locked-in registered retirement savings plan that

      • (i) provides that the funds may only be

        • (A) transferred to another locked-in registered retirement savings plan,

        • (B) transferred to a life income fund, or

        • (C) used to purchase an immediate life annuity or a deferred life annuity,

      • (ii) provides that, on the death of the holder of the locked-in registered retirement savings plan, the funds must be paid to the survivor of the holder by

        • (A) transferring the funds to another locked-in registered retirement savings plan,

        • (B) transferring the funds to a life income fund, or

        • (C) using the funds to purchase an immediate life annuity or a deferred life annuity,

      • (iii) provides that, subject to subsection 25(4) of the Act, the funds, and any interest or right in those funds, must not be transferred, charged, attached, anticipated or given as security and that any transaction appearing to do so is void or, in Quebec, null,

      • (iv) provides that, if the assets of the plan that were transferred into the locked-in registered retirement savings plan were not varied according to the sex of the plan member, an immediate life annuity or a deferred life annuity purchased with the funds accumulated in the locked-in registered retirement savings plan must not differentiate as to sex,

      • (v) contains a statement as to whether the assets of the plan that were transferred were varied according to the sex of the plan member, and

      • (vi) sets out the method of determining the value of the locked-in registered retirement savings plan, including the valuation method used to establish its value on the date of death of the holder of the locked-in registered retirement savings plan or on the date of transfer of assets from the locked-in registered retirement savings plan; or

    • (b) a life income fund that

      • (i) provides that the funds may only be

        • (A) transferred to a locked-in registered retirement savings plan,

        • (B) transferred to another life income fund, or

        • (C) used to purchase an immediate life annuity or a deferred life annuity,

      • (ii) provides that, on the death of the holder of the life income fund, the funds must be paid to the survivor of the holder by

        • (A) transferring the funds to a locked-in registered retirement savings plan,

        • (B) transferring the funds to another life income fund, or

        • (C) using the funds to purchase an immediate life annuity or a deferred life annuity,

      • (iii) sets out the method of determining the value of the life income fund, including the valuation method used to establish its value on the date of death of the holder of the life income fund or on the date of transfer of assets from the life income fund,

      • (iv) provides that the holder of the life income fund must, at the beginning of each calendar year or at any other time agreed to by the financial institution with whom the contract or arrangement was entered into, decide the amount to be paid out of the life income fund in that year,

      • (v) provides that in the event that the holder of the life income fund does not decide the amount to be paid out of the life income fund in a calendar year, the minimum amount determined in accordance with the Income Tax Act must be paid out of the life income fund in that year,

      • (vi) provides that, for any calendar year before the calendar year in which the holder of the life income fund reaches 90 years of age, the amount of income paid out of the life income fund must not exceed the amount determined by the formula

        C/F

        where

        C
        is the balance in the life income fund
        • (A) at the beginning of the calendar year, or

        • (B) if the amount determined under clause (A) is zero, at the date when the assets of the plan were transferred into the life income fund, and

        F
        is the value, as at the beginning of the calendar year, of a pension benefit of which the annual payment is $1, payable on January 1 of each year between the beginning of that calendar year and December 31 of the year in which the holder reaches 90 years of age, established using an interest rate that
        • (A) for the first 15 years after January 1 of the year in which the life income fund is valued, is less than or equal to the monthly average yield on Government of Canada marketable bonds of maturity over 10 years, as published by the Bank of Canada, for the second month before the beginning of the calendar year, and

        • (B) for any subsequent year, is not more than 6%,

      • (vii) provides that, for the calendar year in which the holder of the life income fund reaches 90 years of age and for all subsequent calendar years, the amount of income paid out of the life income fund must not exceed the value of the funds held in the fund immediately before the date of the payment,

      • (viii) provides that, for the calendar year in which the contract or arrangement was entered into, the amount of income paid out of the life income fund, as referred to in subparagraph (vi) or (vii), as the case may be, must be multiplied by the number of months remaining in that year and then divided by 12, with any part of an incomplete month counting as one month,

      • (ix) provides that if, on the day on which the life income fund was established, part of the life income fund was composed of funds that had been held in another life income fund of the holder earlier in the calendar year in which the fund was established, the amount of income paid out of the life income fund, as referred to in subparagraph (vi) or (vii) as the case may be, is deemed to be zero in respect of that part of the life income fund for that calendar year;

      • (x) provides that, subject to subsection 25(4) of the Act, the funds, and any interest or right in those funds, must not be transferred, charged, attached, anticipated or given as security and that any transaction appearing to do so is void or, in Quebec, null,

      • (xi) contains a statement as to whether the assets of the plan that were transferred were varied according to the sex of the plan member, and

      • (xii) provides that, if the assets of the plan that were transferred into a life income fund were not varied according to the sex of the plan member, an immediate life annuity or a deferred life annuity purchased with the funds accumulated in the life income fund must not differentiate as to sex.

  • Marginal note:Form and time limit

    (2) The request to transfer and the consent must be provided in Forms 1 and 2 respectively of the schedule within 90 days after receipt of the statement required under section 3.

Marginal note:Disclosure

 The administrator of the plan must, together with the statement required under subsection 28(2.1) of the Act, provide a written statement to each former member and their spouse or common-law partner, if any, or to the survivor of the former member, that

  • (a) indicates the transfer options set out in section 2;

  • (b) describes the restrictions applicable to those transfer options;

  • (c) informs the former member or survivor that, if they do no make a request under section 2, the administrator must purchase a life annuity on their behalf;

  • (d) discloses the following risks associated with electing the transfer rather than having a life annuity purchased on their behalf by the administrator:

    • (i) that the amount of pension income could be significantly reduced if the future investment performance is lower than expected; and

    • (ii) that the income produced could be insufficient to provide the same retirement income that would otherwise have been received even if the future investment performance equals or exceeds the return that was expected; and

  • (e) sets out the amount determined under section 4 and the amount that the former member or survivor would receive under a life annuity purchased on their behalf.

Marginal note:Assets attributable to a former member

 The amount of the assets of the plan is determined by the formula

A - B + C

where

A
is the commuted value of the former member’s pension as of the effective date of the termination of the plan determined in accordance with section 3500 of the Standards of Practice of the Actuarial Standards Board, published by the Canadian Institute of Actuaries, as amended from time to time,
B
is the sum of any pension payments made from the effective date of the termination of the plan until the day on which the transfer is made, and
C
is the amount of any accumulated interest, calculated at the rate that is used in the termination report to calculate the commuted value of pension benefits, from the effective date of the termination of the plan to the beginning of the month in which the transfer is made.

Coming into Force

Marginal note:Registration

 These Regulations come into force on the day on which they are registered.

 
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