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

Short Title

1 These Regulations may be cited as the Pension Benefits Standards Regulations, 1985.

Interpretation

• 2 (1) In these Regulations,

  accepted actuarial practice

  accepted actuarial practice means the standards of practice described in paragraph 9(2)(b) of the Act, taking into account any specification made by the Superintendent under that paragraph; (normes actuarielles reconnues)

  accountant

  accountant means a person authorized to act as an accountant under the laws of a province; (comptable)

  Act

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

  actuarial gain

  actuarial gain[Repealed, SOR/2010-149, s. 1]

  actuarial report

  actuarial report means an actuarial report filed with the Superintendent under subsection 9.01(5) or 12(2) of the Act or a copy of the report that is provided under subsection 9.01(6) of the Act; (rapport actuariel)

  actuary

  actuary[Repealed, SOR/2011-85, s. 1]

  adjusted solvency asset amount

  adjusted solvency asset amount means the amount determined by multiplying the average solvency ratio by the amount of the solvency liabilities; (montant rajusté de l’actif de solvabilité)

  average solvency ratio

  average solvency ratio means the solvency ratio determined in accordance with subsections 9(8) to (11); (ratio de solvabilité moyen)

  book value

  book value, in respect of an asset, means the cost of acquisition to the person acquiring the asset, including all direct costs associated with the acquisition; (valeur comptable)

  bridging benefit

  bridging benefit means a periodic payment that is provided under a plan to a former member of the plan for a temporary period of time after the former member’s retirement for the purpose of supplementing the former member’s pension benefit until the former member is eligible to receive benefits under the Old Age Security Act or is eligible for or commences to receive retirement benefits under the Canada Pension Plan or An Act respecting the Quebec Pension Plan; (prestation de raccordement)

  Canadian resource property

  Canadian resource property has the same meaning as in paragraph 66(15)(c) of the Income Tax Act; (avoirs miniers canadiens)

  deferred life annuity

  deferred life annuity means a life annuity that

  • (a) commences periodic payments no earlier than one year after its purchase,

  • (b) provides for equal periodic payments or periodic payments that have been varied by reference to

    • (i) the amount of any pension payable under the Old Age Security Act,

    • (ii) the amount of any pension payable under either the Canada Pension Plan or a provincial pension plan as defined in section 3 of the Canada Pension Plan,

    • (iii) the Consumer Price Index for Canada as published by Statistics Canada under the authority of the Statistics Act, or

    • (iv) the value of the assets held in a segregated fund, and

  • (c) is issued by a person authorized to carry on a life insurance business in Canada; (prestation viagère différée)

  experience gain

  experience gain[Repealed, SOR/2010-149, s. 1]

  experience loss

  experience loss[Repealed, SOR/2010-149, s. 1]

  financial institution

  financial institution means

  • (a) except in section 11.1,

    • (i) a bank or an authorized foreign bank within the meaning of section 2 of the Bank Act,

    • (ii) a body corporate to which the Trust and Loan Companies Act applies,

    • (iii) a cooperative credit society to which the Cooperative Credit Associations Act applies,

    • (iv) an insurance company to which the Insurance Companies Act applies,

    • (v) a trust, loan or insurance corporation incorporated by or under an Act of the legislature of a province,

    • (vi) a cooperative credit society incorporated and regulated by or under an Act of the legislature of a province,

    • (vii) an entity that is incorporated or formed by or under an Act of Parliament or of the legislature of a province and that is primarily engaged in dealing in securities, including portfolio management and investment counselling, or

    • (viii) a foreign institution; and

  • (b) for the purposes of section 11.1, those entities referred to in subparagraphs (a)(i) to (vi) or a foreign institution for which an order of the Superintendent has been made under section 574 of the Insurance Companies Act; (institution financière)

  foreign institution

  foreign institution means an entity that is

  • (a) engaged in the business of banking, the trust, loan or insurance business, the business of a cooperative credit society or the business of dealing in securities or is otherwise engaged primarily in the business of providing financial services, and

  • (b) incorporated or formed otherwise than by or under an Act of Parliament or of the legislature of a province; (institution étrangère)

  going concern assets

  going concern assets means the value of the assets of a plan, including income due and accrued, determined on the basis of a going concern valuation; (actif évalué en continuité)

  going concern deficit

  going concern deficit means the amount by which the going concern liabilities exceed the going concern assets; (déficit évalué en continuité)

  going concern excess

  going concern excess means the amount by which the going concern assets exceed the going concern liabilities; (excédent évalué en continuité)

  going concern liabilities

  going concern liabilities means the present value of the accrued benefits of a plan as determined on the basis of a going concern valuation, including

  • (a) amounts due and unpaid;

  • (b) in the case of a negotiated contribution plan, a provision for adverse deviations; and

  • (c) in the case of any other plan, a provision for adverse deviations, if any; (passif évalué en continuité)

  going concern ratio

  going concern ratio means the ratio of the going concern assets to the going concern liabilities, on the basis of the most recent actuarial report, excluding those going concern assets and going concern liabilities that are attributable to benefits paid by means of an insurance contract or an annuity, other than a revocable annuity; (ratio de continuité)

  going concern special payment

  going concern special payment means a special payment made in respect of an unfunded liability under subsection 9(3); (paiement spécial de continuité)

  going concern valuation

  going concern valuation means a valuation of the assets and liabilities of a plan using actuarial assumptions and methods that are in accordance with accepted actuarial practice for the valuation of a plan that is not expected to be terminated or wound up; (évalué en continuité)

  immediate life annuity

  immediate life annuity means a life annuity that

  • (a) commences periodic payments within one year after its purchase,

  • (b) provides for equal periodic payments or periodic payments that have been varied by reference to

    • (i) the amount of any pension payable under the Old Age Security Act,

    • (ii) the amount of any pension payable under either the Canada Pension Plan or a provincial pension plan as defined in section 3 of the Canada Pension Plan,

    • (iii) the Consumer Price Index for Canada as published by Statistics Canada under the authority of the Statistics Act, or

    • (iv) the value of the assets held in a segregated fund, and

  • (c) is issued by a person authorized to carry on a life insurance business in Canada; (prestation viagère immédiate)

  insured plan

  insured plan means a plan in which all benefits are paid by means of an annuity or insurance contract issued by a person authorized to carry on a life insurance business in Canada and under which the person is obligated to pay all the benefits set out in the plan; (régime assuré)

  investment fund

  investment fund means a fund — established by a corporation, limited partnership or trust — the purpose of which is to invest the moneys of two or more investors and the shares or units of which are allocated to each investor in proportion to the interest of the investor in the assets of the fund; (fonds de placement)

  letter of credit

  letter of credit means a letter of credit that meets the requirements of subsection 9.1(5); (lettre de crédit)

  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 section 20.1; (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 section 20; (régime enregistré d’épargne-retraite immobilisée)

  marketplace

  marketplace means

  • (a) an exchange;

  • (b) a quotation and trade-reporting system;

  • (c) any other entity that

    • (i) constitutes, maintains or provides a market or facility for bringing together buyers and sellers of securities or derivatives,

    • (ii) brings together the orders for securities or derivatives of multiple buyers and sellers, and

    • (iii) uses established, non-discretionary methods under which the orders interact and with which the buyers and sellers entering the orders agree to the terms of a trade; (marché)

  market value

  market value, in respect of an asset, means the price that would be obtained in the purchase or sale of the asset in an open market under conditions requisite to a fair transaction between parties who are at arm’s length and acting prudently, knowledgeably and willingly; (valeur marchande)

  member choice account

  member choice account means an account in relation to which a member, former member, survivor or former spouse or former common-law partner of the member or former member is permitted to make investment choices under a plan referred to in subsection 8(4.2) of the Act; (compte accompagné de choix)

  mutual fund

  mutual fund or pooled fund[Repealed, SOR/2015-60, s. 1]

  normal cost

  normal cost means the cost of benefits that are to accrue during a plan year, as determined on the basis of a going concern valuation, excluding special payments and including

  • (a) in the case of a negotiated contribution plan, a provision for adverse deviations of at least 5%; and

  • (b) in the case of any other plan, a provision for adverse deviations, if any; (coûts normaux)

  plan

  plan means a pension plan; (régime)

  plan year

  plan year[Repealed, SOR/2011-85, s. 1]

  prior second valuation date

  prior second valuation date in relation to a valuation date, means the day two years prior to that valuation date; (deuxième date d’évaluation antérieure)

  prior valuation date

  prior valuation date in relation to a valuation date, means the day one year prior to that valuation date; (date d’évaluation antérieure)

  PRPP

  PRPP means a plan registered under section 12 of the Pooled Registered Pension Plans Act; (RPAC)

  restricted life income fund

  restricted 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 section 20.3; (fonds de revenu viager restreint)

  restricted locked-in savings plan

  restricted locked-in 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 section 20.2; (régime d’épargne immobilisée restreint)

  segregated fund

  segregated fund means a fund established by a corporation that is duly authorized to operate a fund in which contributions to a pension plan are deposited and the assets of which are held exclusively for the purposes of that plan alone or that plan and one or more other pension plans; (caisse séparée)

  simplified pension plan

  simplified pension plan[Repealed, SOR/2015-60, s. 1]

  solvency assets

  solvency assets means the amount determined by the formula

  A + B - C

  where

  A

  is the market value of the assets that relate to the defined benefit provisions of a plan as determined at the valuation date,

  B

  is the face value of all letters of credit in effect on the valuation date, other than those being used to fund a plan under Part 3 of the Solvency Funding Relief Regulations or Part 3 of the Solvency Funding Relief Regulations, 2009, up to a maximum of 15% of the solvency liabilities of the plan as determined at the valuation date, and

  C

  is the estimated expense of the winding-up of the plan as certified by an actuary; (actif de solvabilité)

  solvency deficiency

  solvency deficiency means the amount by which the solvency liabilities exceed the adjusted solvency asset amount; (déficit de solvabilité)

  solvency excess

  solvency excess means the amount by which the adjusted solvency asset amount exceeds the solvency liabilities; (excédent de solvabilité)

  solvency liabilities

  solvency liabilities means the liabilities of a plan that relate to defined benefit provisions and are determined on the basis that the plan is terminated; (passif de solvabilité)

  solvency ratio

  solvency ratio means

  • (a) for a plan that is a defined contribution plan that does not have defined benefit provisions, and an insured plan, one; and

  • (b) for any other plan, the ratio of the solvency assets to the solvency liabilities, excluding those solvency assets and solvency liabilities that are attributable to benefits that are paid by means of an annuity, other than a revocable annuity, or an insurance contract, based on the most recent actuarial report; (ratio de solvabilité)

  solvency special payment

  solvency special payment means a special payment made under paragraph 9(4)(c) or (d); (paiement spécial de solvabilité)

  solvency valuation

  solvency valuation means a valuation of the assets and liabilities of a plan using actuarial assumptions and methods that are in accordance with accepted actuarial practice for the valuation of a plan, determined on the basis that the plan is terminated; (évaluation de la solvabilité)

  special payment

  special payment means a payment or one of a series of payments determined in accordance with section 9 and made for the purpose of liquidating an unfunded liability or a solvency deficiency; (paiement spécial)

  valuation date

  valuation date means the date on which the actuarial report values the liabilities of a plan; (date d’évaluation)

• (2) Disability means

  • (a) for the purpose of paragraph 18(2)(b) of the Act, a mental or physical condition that a physician has certified as being likely to shorten considerably the life expectancy of a member; and

  • (b) for the purpose of determining pensionable age, a mental or physical condition that a physician has certified as rendering a member unable to perform the member’s duties as an employee. (invalidité)

Designated Provinces

3 For the purposes of the definition designated province in subsection 2(1) of the Act, Ontario, Quebec, Nova Scotia, New Brunswick, Manitoba, British Columbia, Saskatchewan, Alberta and Newfoundland and Labrador are prescribed as provinces in which there is in force pension legislation applicable to private superannuation plans.

Excepted Employment

4 The employment described in Schedule I is excepted from included employment.

Choice of Pension Committee and Pension Council Representative

• 5 (1) The representatives of the plan members or retired members who are to be included on a pension committee referred to in section 7.1 of the Act or a pension council referred to in section 7.2 of the Act shall be chosen in accordance with this section.

• (2) A majority of the plan members or retired members shall notify an employer or a participating employer in writing of their decision to elect a representative of the members or retired members.

• (3) Subject to subsection (5), the election of a representative of the plan members shall be conducted in the following manner:

  • (a) on receipt of a notice, referred to in subsection (2), the employer shall post, in areas that are accessible to the plan members, a notice;

    • (i) advising the members of an election, and

    • (ii) establishing a period of not less than two weeks and not more than four weeks during which nominations for the position of representative of the plan members may be made by plan members;

  • (b) nominations for the position of a representative of the plan members shall be filed in writing with the employer;

  • (c) on the closing of the nomination period, the employer shall post, in areas that are accessible to the plan members, a notice specifying

    • (i) the names of the nominees,

    • (ii) a time within the next two weeks at which plan members may cast their votes, and

    • (iii) a location at the place of employment at which plan members may cast their votes;

  • (d) the election shall be conducted by the employer by secret ballot and each plan member shall be entitled to one vote for the representative to be elected;

  • (e) the representative elected shall be the nominee with the greatest number of votes;

  • (f) where two or more nominees receive an equal number of votes that is greater than the number of votes received by any other nominee, the name of each of the first-mentioned nominees shall be placed in a container and the elected representative shall be the nominee whose name is drawn by a person who is not a nominee; and

  • (g) the employer shall post, in areas that are accessible to the plan members, a notice specifying the results of the election.

• (4) Subject to subsection (5), the election of a representative of the retired members shall be conducted in the following manner:

  • (a) on receipt of a notice, referred to in subsection (2), the employer shall mail to each retired member a notice;

    • (i) advising the retired member of an election, and

    • (ii) establishing a period of not less than four weeks and not more than eight weeks in which nominations for the position of representative of the retired members may be made by the retired members;

  • (b) nominations for the position of a representative of the retired members shall be filed in writing with the employer;

  • (c) on the closing of the nomination period, the employer shall mail to each retired member a ballot containing the names of the nominees and specifying a period of not less than four weeks and not more than eight weeks in which the ballot must be returned to the employer;

  • (d) the election shall be conducted by the employer by secret ballot and each retired member shall be entitled to one vote for the representative to be elected;

  • (e) the representative elected shall be the nominee with the greatest number of votes;

  • (f) the employer shall notify the retired members by mail of the result of the election; and

  • (g) where two or more nominees receive an equal number of votes that is greater than the number of votes received by any other nominee, the name of each of the first-mentioned nominees shall be placed in a container and the elected representative shall be the nominee whose name is drawn by a person who is not a nominee.

• (5) If all the plan members or retired members are

  • (a) represented by a union or group of unions as defined in the Canada Labour Code, or

  • (b) members of a pension fund society established under the Pension Fund Societies Act or of another similar organization,

  the executive of the union, group of unions, pension fund society or other organization may name the pension committee or pension council representative.

• (6) After an election for the position of representative of the plan members or retired members has been held pursuant to subsection (3) or (4), an election for that position shall be held thereafter at intervals not exceeding three years.

• (7) If a pension council has been established pursuant to subsection 7.2(1) of the Act and the plan now has fewer than 50 members, the pension council shall be dissolved if a majority of the plan members so request.

Investments

• 6 (1) Every plan shall provide that the moneys of the pension fund are to be

  • (a) invested in accordance with Schedule III; and

  • (b) invested

    • (i) in a name that clearly indicates that the investment is held in trust for the plan and, where the investment is capable of being registered, registered in that name,

    • (ii) in the name of a financial institution, or a nominee of it, in accordance with a custodial agreement or trust agreement, entered into on behalf of the plan with the financial institution, that clearly indicates that the investment is held for the plan, or

    • (iii) in the name of CDS Clearing and Depository Services Inc., or a nominee of it, in accordance with a custodial agreement or trust agreement, entered into on behalf of the plan with a financial institution, that clearly indicates that the investment is held for the plan.

• (2) For the purposes of subsection (1), custodial agreement means an agreement providing that

  • (a) an investment made or held on behalf of a plan pursuant to the agreement

    • (i) constitutes part of the plan’s pension fund, and

    • (ii) shall not at any time constitute an asset of the custodian or nominee; and

  • (b) records shall be maintained by the custodian that are sufficient to allow the ownership of any investment to be traced to the plan at any time.

7 The administrator of a plan shall maintain a current record that clearly identifies every investment held on behalf of the plan, the name in which the investment is made and, where appropriate, the name in which the investment is registered.

• 7.1 (1) The administrator of a plan shall, before the day on which the plan is registered, establish a written statement of investment policies and procedures that pertain to the plan’s portfolio of investments and loans, other than those relating to any member choice account, including policies and procedures pertaining to

  • (a) categories of investments and loans, including derivatives, options and futures,

  • (b) diversification of the investment portfolio,

  • (c) asset mix and rate of return expectations,

  • (d) liquidity of investments,

  • (e) the lending of cash or securities,

  • (f) the retention or delegation of voting rights acquired through plan investments,

  • (g) the method of, and basis for, the valuation of investments that are not regularly traded at a marketplace; and

  • (h) related party transactions permitted under section 17 of Schedule III and the criteria to be used to establish whether a transaction is nominal or immaterial to the plan,

  having regard to all factors that may affect the funding and solvency of the plan and the ability of the plan to meet its financial obligations.

• (2) The statement of investment policies and procedures referred to in subsection (1) shall include a description of the factors referred to in that subsection and the relationship of those factors to those policies and procedures.

• (3) The administrator of a plan shall submit the statement of investment policies and procedures referred to in subsection (1)

  • (a) to any pension council that has been established, within 60 days after the later of

    • (i) the day on which the statement is established, and

    • (ii) the day on which the pension council is established; and

  • (b) where a plan is a defined benefit plan, to the actuary to the plan on or before the day that is the later of

    • (i) 60 days after the day on which the statement is established, and

    • (ii) the day on which the actuary is appointed.

• 7.2 (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.

Member Choice Accounts

• 7.3 (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.

Funding

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

• 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 the plan is not a negotiated contribution plan and 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 the plan is not a negotiated contribution plan and 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.

Letters of Credit

• 9.1 (1) The following definitions apply in this section.

  acceptable rating

  acceptable rating means the rating, given by a credit rating agency to an issuer at the time of the issuance or renewal of a letter of credit, that is at least equal to one of the following ratings:

  • (a) A, from Dominion Bond Rating Service Limited;

  • (b) A, from Fitch Ratings;

  • (c) A2, from Moody’s Investors Service; and

  • (d) A, from Standard & Poor’s Ratings Services. (note acceptable)

  ATB

  ATB means Alberta Treasury Branches established under the Alberta Treasury Branches Act of the Province of Alberta. (ATB)

  bank

  bank means a bank or authorized foreign bank, as defined in section 2 of the Bank Act. (banque)

  cooperative credit society

  cooperative credit society means a cooperative credit society to which the Cooperative Credit Associations Act applies or a cooperative credit society that is incorporated and regulated by or under an Act of the legislature of a province. (coopérative de crédit)

  default

  default means the occurrence of one of the following:

  • (a) the written notification to the Superintendent that the administrator intends to terminate or wind up the whole of the pension plan under subsection 29(5) of the Act;

  • (b) the amendment of the plan, resolution by the employer or coming into force of any other measure that effects the termination of the whole of the plan;

  • (c) the Superintendent’s declaration under subsection 29(2) or (2.1) of the Act that terminates the whole of the plan;

  • (d) the bankruptcy of the employer or the filing of an application or petition by or against the employer under the Winding-up and Restructuring Act;

  • (e) the non-renewal of a letter of credit for its full face value unless

    • (i) it has been replaced by another letter of credit for the same face value on or before the expiry of the letter of credit,

    • (ii) an amount equal to the face value of the letter of credit has been remitted to the pension fund on or before the expiry of the letter of credit, or

    • (iii) the face value of the letter of credit has been reduced in accordance with subsection (2), (3) or (4); and

  • (f) the failure by an employer to comply with a direction issued by the Superintendent under section 11 of the Act with respect to the face value a letter of credit referred to in subsection 9(13.1). (défaut)

  issuer

  issuer means a bank, a cooperative credit society or an ATB, that has an acceptable rating by two credit rating agencies, is not an employer or affiliated with an employer within the meaning of subsection 2(2) of the Canada Business Corporations Act and is a member of the Canadian Payment Association. (émetteur)

• (2) If the aggregate face value of the letters of credit held for the benefit of the plan exceeds 15% of the solvency liabilities of the plan as determined at the valuation date and if, based on the most recent actuarial report,

  • (a) the average solvency ratio and the solvency ratio of the plan are 1.0 or more, the aggregate face value of the letters of credit may be reduced by the lesser of

    • (i) the amount by which the aggregate face value of the letters of credit exceeds 15% of the solvency liabilities of the plan as determined at the valuation date, and

    • (ii) the lesser of the solvency excess and the excess of the solvency assets over the solvency liabilities; and

  • (b) either the average solvency ratio or the solvency ratio of the plan is less than 1.0, the aggregate face value of the letters of credit may be reduced by the amount of the excess referred to in subparagraph (a)(i) to the extent of the difference between

    • (i) the amount of the solvency special payment for the plan year following the valuation date, and

    • (ii) the amount of the solvency special payment that does not take into consideration the maximum referred to in the description of B of the definition solvency assets in subsection 2(1) for the plan year following the valuation date.

• (3) An employer may reduce the face value of a letter of credit after making a payment to the pension fund of the amount of the reduction.

• (4) The face value of a letter of credit may be reduced if, based on the most recent actuarial report,

  • (a) the solvency ratio of the plan would have been no less than 1.05 had the reduced face value been in effect at the valuation date; and

  • (b) the average solvency ratio of the plan would have been no less than 1.0 had the reduced face value been in effect at the valuation date.

• (5) A letter of credit shall be an irrevocable and unconditional standby letter of credit that

  • (a) is in accordance with the rules of the International Standby Practices ISP98, International Chamber of Commerce Publication No. 590, as amended from time to time;

  • (b) specifies the date that it becomes effective, which can be no later than the date on which the instalment of the special payment that is being replaced is due, and the date that it expires, which shall be the day on which the plan year ends;

  • (c) provides that the issuer will pay the face value of the letter of credit on demand from the trustee without inquiring whether the trustee has a right to make the demand;

  • (d) is payable in Canadian currency;

  • (e) provides that

    • (i) the insolvency, liquidation or bankruptcy of the employer is to have no effect on the rights or the obligations of the issuer of the letter of credit or the trustee,

    • (ii) it will, in accordance with these Regulations, be renewed, replaced or allowed to expire without renewal or replacement, and

    • (iii) it may not be

      • (A) assigned except by the issuer to another issuer, or

      • (B) amended except

        • (I) on a renewal, to increase the face value or to decrease the face value,

        • (II) if a successor issuer has taken over the rights and obligations under it from a predecessor issuer, to change the name of that predecessor to the name of that successor,

        • (III) following an assignment, to reflect the change in issuer, and

        • (IV) to decrease the face value in accordance with these Regulations;

  • (f) provides that if the issuer assigns the letter of credit without the agreement of the employer or, after the issuance of the letter of credit, fails to meet the definition of an issuer, the issuer is still required to pay the face value of the letter of credit on demand from the trustee; and

  • (g) provides that any amendments to the letter of credit be provided to the employer within five days after the amendment is made.

• (6) The employer or, if the employer is not the administrator of the plan, the administrator shall enter into a trust agreement or may amend any existing trust agreement that they may have with the trustee regarding the letters of credit.

• (7) If the employer is not the administrator, the administrator shall give a copy of the trust agreement to the employer within 10 business days after entering into or amending a trust agreement.

• (8) The trust agreement shall provide that

  • (a) the trustee shall hold letters of credit in Canada in trust for the plan;

  • (b) the definition default in subsection (1) applies to the agreement;

  • (c) the employer shall immediately notify, in writing, the trustee and the Superintendent and, if the employer is not the administrator of the plan, the administrator of a default;

  • (d) if not otherwise notified under paragraph (c), the administrator shall notify, in writing, the trustee and the Superintendent of a default immediately after becoming aware of it;

  • (e) on receipt of the notice referred to in paragraph (c) or (d), the trustee shall immediately make a demand for payment of the face value of

    • (i) all of the letters of credit held for the benefit of the plan, if the default is one that is described in any of paragraphs (a) to (d) and (f) of the definition default in subsection (1), and

    • (ii) the letter of credit that has not been renewed, if the default is one that is described in paragraph (e) of that definition;

  • (f) on receipt of a written notice of default from any person other than the employer or the administrator, the trustee shall

    • (i) immediately notify, in writing, the employer, the administrator and the Superintendent of the notice, and

    • (ii) make a demand for payment of the face value of all of the letters of credit held for the benefit of the plan unless the administrator provides a written notice to the trustee within 30 days after receipt of the notice that the default has not occurred;

  • (g) when a trustee makes a demand for payment of the face value of a letter of credit held for the benefit of the plan, it shall notify, in writing, the employer, the administrator and the Superintendent that it has made the demand;

  • (h) the trustee shall immediately notify, in writing, the employer, the administrator and the Superintendent if the issuer does not pay the face value of a letter of credit after a demand for payment has been made;

  • (i) the trustee shall not make a demand for payment if a letter of credit expires without being renewed or if the face value is being reduced, in accordance with these Regulations; and

  • (j) the administrator shall notify the trustee of any circumstance in which a letter of credit may expire or when the face value of a letter of credit may be reduced, under these Regulations.

• (9) The employer shall provide to the trustee

  • (a) the letter of credit, on its initial issuance, at least 15 days before the day on which the first instalment of a solvency deficiency payment to which the letter of credit relates is due;

  • (b) if a letter of credit is replacing another, the replacement letter of credit at least 15 days before the expiry of the letter of credit that is being replaced;

  • (c) if an expiring letter of credit is to be renewed, the renewed letter of credit at least 15 days before the day on which it would otherwise have expired; and

  • (d) if the letter of credit is being amended, the amended letter of credit within 15 days after the day on which the letter of credit was amended.

• (10) Any demand made by the trustee in respect of a letter of credit shall be in writing or in any other form that the letter of credit provides.

• (11) An issuer who assigns a letter of credit to another issuer shall inform the Superintendent, the employer, the administrator and the trustee of the transaction within 15 days after the assignment.

Crown Corporations

9.2 A Crown corporation may reduce solvency special payments for a plan year under section 9.16 of the Act if

• (a) it is an agent of Her Majesty in right of Canada;

• (b) it has notified the Minister and the appropriate Minister, as defined in subsection 83(1) of the Financial Administration Act, of the decision to reduce its solvency special payments;

• (c) it obtains from the Minister and the appropriate Minister, as defined in subsection 83(1) of the Financial Administration Act, letters acknowledging that they have been informed that it intends to reduce its solvency special payments and that they do not object to the reduction; and

• (d) it files the information and documentation described in paragraphs (b) and (c) with the Superintendent within 60 days after the reduction is made.

Void Amendment

• 9.3 (1) For the purposes of subparagraph 10.1(2)(b)(ii) of the Act, the prescribed solvency ratio level is 0.85.

• (2) For the purposes of subparagraph 10.1(2)(b)(ii) of the Act, the solvency ratio following the amendment is the solvency ratio set out in the most recent actuarial report adjusted to reflect

  • (a) the effect on the solvency ratio of the increase in solvency liabilities as a result of the amendment, determined in accordance with subsection 9(13); and

  • (b) the effect of any lump sum payment to the pension fund made before the later of

    • (i) the effective date of the amendment; and

    • (ii) the date when the actuarial report prepared in respect of the amendment was filed with the Superintendent.

• (3) For the purposes of subparagraph 10.1(2)(b)(iii) of the Act, the prescribed solvency ratio level is 1.0

  • (a) during a negotiation period referred to in subsection 29.04(1) of the Act; and

  • (b) while a funding schedule approved by the Minister under section 29.3 of the Act is in effect.

• (4) For the purposes of paragraph 10.1(2)(c) of the Act, if the amendment would increase pension benefits or pension benefit credits, the going concern ratio — as adjusted to reflect the increase in going concern liabilities resulting from the amendment — must not be below 1.05 after the amendment.

• 10 (1) An administrator who fails to pay into the fund any amount remitted to the administrator under subsection 9(14) is liable to the plan for the outstanding payment and interest on it.

• (2) If an employer fails to make payments to the plan at the times set out in subsection 9(14) or fails to make payments in accordance with subsection 29(6) of the Act or if the administrator is liable under subsection (1), the interest rate shall be

  • (a) in respect of a going concern special payment, the one used to determine the going concern liabilities;

  • (b) in respect of a solvency special payment, the one used to determine the solvency liabilities;

  • (c) in respect of a normal cost, the one applicable in paragraph (a);

  • (d) in respect of any other payments, the one applicable in paragraph (b); and

  • (e) in respect of an amount required to be paid under a defined contribution provision, the greater of the rate of return of the fund as at the date that the amount was required to be paid and 0%.

Distressed Pension Plan Workout Scheme

Election

10.1 An election under subsection 29.03(1) of the Act may only be made once every 48 months.

10.2 For the purposes of subsection 29.03(3) of the Act,

• (a) an employer that is not subject to proceedings under the Companies’ Creditors Arrangement Act or Part III of the Bankruptcy and Insolvency Act shall make the declaration in Form 1 of Schedule VI if it is governed by a Board of Directors or in Form 2 of Schedule VI if it is not governed by a Board of Directors; or

• (b) an employer that is subject to proceedings under the Companies’ Creditors Arrangement Act or Part III of the Bankruptcy and Insolvency Act shall make the declaration in Form 3 of Schedule VI if it is governed by Board of Directors and in Form 4 of Schedule VI if it is not governed by a Board of Directors.

10.3 An election under section 29.03 of the Act shall not be made in respect of a plan that is subject to the Air Canada Pension Plan Funding Regulations, 2014 or the Canadian Press Pension Plan Solvency Deficiency Funding Regulations, 2010.

Information to be Provided to Members and Beneficiaries

10.4 The employer shall provide the following information to the members and beneficiaries within 10 days after the beginning of the negotiation period:

• (a) notice that the employer has entered into a distressed pension plan workout scheme;

• (b) a statement indicating that a request for approval by the Minister of a funding schedule may only be made if less than one third of the members and less than one third of the beneficiaries object;

• (c) a statement indicating that a collective bargaining agent may object or consent to a proposed workout agreement on behalf of the members that it represents;

• (d) a statement indicating that a court-appointed representative may consent to a proposed workout agreement if less than one third of the members or one third of the beneficiaries that they represent object to the agreement;

• (e) a statement indicating that the Minister’s approval is required to give effect to the funding schedule; and

• (f) written notice of their right to examine the copies of the documents and information referred to in paragraph 28(1)(c) of the Act.

10.5 The representative, or the employer if the representative consents, shall, in writing, inform the members or beneficiaries that they represent of their representation within 10 business days after their appointment by the Federal Court or the court referred to in section 10.8.

End of Negotiation Period

• 10.6 (1) For the purposes of subsection 29.04(1) of the Act, the negotiation period ends on the earlier of

  • (a) the day on which the funding schedule is approved by the Minister, and

  • (b) the date determined under subsection (2).

• (2) The negotiation period ends

  • (a) if the declaration referred to in subsection 29.03(4) of the Act is filed in the six month period following the end of the plan year, on the last day of the ninth month following the end of the plan year; and

  • (b) in any other case, on the last day of the ninth month following the date on which the declaration referred to in subsection 29.03(4) is filed.

Appointment of Representatives

10.7 For the purposes of subsection 29.08(3) of the Act, the representatives shall

• (a) be capable of fairly and adequately representing the interests of the persons that they represent; and

• (b) not have an interest that is in conflict with the interests of the persons represented.

10.8 For the purposes of subsection 29.08(2) of the Act, the appropriate court is the court in which a notice of intention or a proposal is filed under Part III of the Bankruptcy and Insolvency Act or the court that issued the initial order under the Companies’ Creditors Arrangement Act.

Information to be Provided to Representatives

• 10.9 (1) The administrator, or the employer if the administrator is not the employer, shall provide to a representative

  • (a) within 10 days after the representative’s appointment under subsection 29.08(3) of the Act

    • (i) copies of the information return, the actuarial reports and the financial statements that have been filed with the Superintendent within the past three plan years under subsections 12(1) and (2) of the Act,

    • (ii) a copy of the plan,

    • (iii) a copy of the statement of investment policies and procedures of the plan established under section 7.1,

    • (iv) a list of the 10 largest asset holdings of the pension fund in descending order of asset value, along with the corresponding asset value, and

    • (v) the total face value of the letters of credit held in trust for the plan; and

  • (b) within 10 business days after a request of the representative, a copy of any document or information that members may examine under paragraph 28(1)(c) of the Act.

• (2) If the representative is a bargaining agent, the administrator, or the employer if the administrator is not the employer, shall provide the documents and information required under paragraph (1)(a) to the representative within 30 days after the day on which the declaration is filed under subsection 29.03(4) of the Act.

Disclosure Requirements — Proposed Workout Agreement

• 10.91 (1) For the purposes of subsection 29.2(1) of the Act, the members and beneficiaries shall be provided with the following information within 10 days after the day on which the employer and the representatives enter into the proposed workout agreement:

  • (a) written notice that the representatives and the employer have negotiated a proposed workout agreement respecting the funding schedule;

  • (b) the amount of the going concern deficit and of the solvency deficiency subject to the proposed workout agreement and the proposed funding schedule for those amounts;

  • (c) the special payments that would have been payable in the current plan year if the going concern deficit and the solvency deficiency had been funded in accordance with section 9;

  • (d) a written notice indicating that the funding schedule set out in the proposed workout agreement may only be submitted to the Minister for approval if less than one third of the members and less than one third of beneficiaries of the plan object; and

  • (e) if members and beneficiaries are represented by a representative that is not a bargaining agent, a description of how the members or beneficiaries may object to the proposed agreement and the period during which an objection may be made.

• (2) For the purposes of subsection 29.09(1) of the Act, the employer and administrator shall provide the representatives with any information required to comply with subsection (1).

Consent of Members and Beneficiaries

10.92 A period of 30 days beginning on the day on which the information is provided under section 10.91 is prescribed for the purposes of subsection 29.2(2) of the Act.

10.93 A period of 40 days beginning on the day on which the information is provided under section 10.91 is prescribed for the purposes of subsection 29.3(2) of the Act.

Request for Approval

10.94 For the purposes of subsection 29.3(3) of the Act, the request for approval of the funding schedule shall be submitted to the Minister within 15 days after the end of the period referred to in section 10.93 and shall be accompanied by a description of how the funding schedule addresses the criteria referred to in section 10.95.

Ministerial Considerations

10.95 For the purposes of subsection 29.3(4) of the Act, the Minister shall consider

• (a) the extent to which the defined benefit provisions of the plan have been amended and the extent to which those amendments have changed the cost structure of the plan; and

• (b) the manner in which the proposed workout agreement addresses the sustainability of the plan with reference to such factors as the investment policies of the plan, the demographic profile of the plan’s membership and the nature of the plan’s benefits.

Notification of Minister’s Decision

10.96 The administrator, or the representative if the representative consents, shall notify all members and beneficiaries of the Minister’s decision under subsection 29.3(4) of the Act within five business days after receiving notification from the Minister.

Minimum Requirements for Funding Schedule

10.97 The funding schedule shall meet the following requirements:

• (a) the funding schedule shall only address the funding and liquidation of a solvency deficiency and an unfunded liability as determined at the latest valuation date minus special payments and other payments due to the plan before the start of the negotiation period;

• (b) the funding schedule shall specify the amounts of the going concern payments and solvency payments payable in each plan year that are used to fund the solvency deficiency and unfunded liability referred to in paragraph (a);

• (c) the payments shall be made to the plan in equal monthly instalments;

• (d) the aggregate present value, as at the end of the most recent plan year preceding the establishment of the funding schedule, of the going concern payments included in the funding schedule and the going concern special payments due to the plan before the start of the negotiation period shall be at least equal to the going concern deficit of the plan at the end of that year;

• (e) the aggregate present value, as at the end of the most recent plan year preceding the establishment of the funding schedule, of the solvency payments and the going concern payments included in the funding schedule and the special payments due to the plan before the start of the negotiation period shall be at least equal to the solvency deficiency of the plan as at the end of the plan year preceding the plan year in which the payment is to be made;

• (f) any annual going concern payment included in the funding schedule shall be no less than the annual amount of interest on the outstanding balance of the going concern deficit of the plan as at the end of the plan year preceding the plan year in which the payment is to be made;

• (g) any annual solvency payment included in the funding schedule shall be no less than the annual amount of interest on the outstanding balance of the solvency deficiency as at the end of the plan year preceding the plan year in which the payment is to be made;

• (h) the aggregate going concern payments to be made in the first half of the funding schedule shall be no less than 40% of the aggregate going concern payments for the entire duration of the funding schedule;

• (i) the aggregate solvency payments to be made in the first five plan years of the funding schedule shall be no less than 40% of the aggregate solvency payments for the entire duration of the funding schedule;

• (j) the interest rate used to determine the present value of going concern payments referred to in paragraph (d) and the interest rate used to calculate the amount of interest referred to in paragraph (f) is the same as the interest rate used to determine the going concern liabilities of the plan as at the valuation date; and

• (k) the interest rate used to determine the present value of solvency payments referred to in paragraph (e) and the interest rate used to calculate the interest in accordance with paragraph (g) is the same as the interest rate used to determine the solvency liabilities of the plan as at the valuation date.

Optional Requirements for Funding Schedule

10.98 A funding schedule may provide that if

• (a) the funding schedule includes the funding of an unfunded liability or solvency deficiency and the unfunded liability or solvency deficiency is liquidated at a rate greater than the sum of payments set out in the funding schedule by the making of additional payments, the amount of a payment set out in a funding schedule for a subsequent year may be reduced if the outstanding balance of the unfunded liability that is being liquidated by the remaining payments set out in the funding schedule or the solvency deficiency that is being liquidated by those payments will at no time be greater than it would have been had the payments that were required to be made under the funding schedule in relation to the unfunded liability or solvency deficiency, whichever is applicable, been made;

• (b) the funding schedule includes the funding of an unfunded liability and the aggregate of the present value of payments set out in the funding schedule and of going concern special payments, established in respect of a period after the valuation date, exceeds the going concern deficit, that excess may be applied to reduce the going concern payments that will become due at the latest dates in the approved funding schedule in such a way that the present value of those payments is reduced by the amount of reduction applied to the outstanding balance of the unfunded liability; and

• (c) there is a solvency excess as described in subsection 10.991(2), the payments established to liquidate a solvency deficiency that will become due at the latest dates in the approved funding schedule may be eliminated or reduced in such a way that the present value of the remaining payments set out in the funding schedule to liquidate the solvency deficiency is reduced by the solvency excess.

Occurrence of Events After Approval of a Funding Schedule

10.99 For the purposes of section 9, an unfunded liability that emerges after the day on which the funding schedule was approved by the Minister under section 29.3 of the Act shall be calculated as the amount by which the going concern deficit of a plan as determined at the valuation date exceeds the aggregate of

• (a) the present value of going concern special payments established in respect of a period after the valuation date,

• (b) the present value of the going concern payments set out in the funding schedule, established in respect of a period after the valuation date, and

• (c) the present value of the solvency payments set out in the funding schedule, established in respect of a period after the valuation date.

• 10.991 (1) For the purposes of section 9, a solvency deficiency that emerges after the day on which a funding schedule is approved by the Minister under section 29.3 of the Act shall be calculated as the amount by which the solvency liabilities exceed the aggregate of

  • (a) the adjusted solvency asset amount,

  • (b) the present value of the solvency payments set out in the funding schedule, established in respect of a period after the valuation date, and

  • (c) the present value of the going concern payments set out in the funding schedule, established in respect of a period beginning after the valuation date and ending on the date of the last solvency payment referred to in paragraph (b).

• (2) For the purposes of section 9, a solvency excess that emerges after the day on which a funding schedule is approved by the Minister under section 29.3 of the Act shall be calculated as the amount by which the aggregate of the following amounts exceeds the solvency liabilities:

  • (a) the adjusted solvency asset amount,

  • (b) the present value of the solvency payments set out in the funding schedule, established in respect of a period after the valuation date, and

  • (c) the present value of the going concern payments set out in the funding schedule, established in respect of a period beginning after the valuation date and ending on the date of the last solvency payment referred to in paragraph (b).

Funding and Governance Policies

Marginal note:Funding policy

10.992 For the purposes of section 10 of the Act, the funding policy of a negotiated contribution plan shall set out

• (a) the funding objectives for the plan as they relate to benefit security, benefit levels and contribution levels;

• (b) the material risks that affect the plan’s funding requirements, the tolerance for those risks and the internal controls to manage them;

• (c) the objectives and expectations for reducing pension benefits in the event that a reduction is required; and

• (d) the procedures for the use of surplus.

Marginal note:Governance policy

10.993 For the purposes of section 10 of the Act, the governance policy of a negotiated contribution plan shall set out

• (a) the governance structures and processes for overseeing, managing and administering the plan;

• (b) what those structures and processes are intended to achieve;

• (c) the roles, responsibilities and accountabilities of all governance participants who have authority to make decisions in respect of those structures and processes;

• (d) the performance measures and the process established for evaluating, against those measures, the performance of each governance participant;

• (e) the procedures established to ensure that the administrator and, as necessary, other governance participants have access to relevant, timely and accurate information in order to meet their fiduciary and other responsibilities;

• (f) the code of conduct and the procedure established to disclose and address conflicts of interest of the administrator;

• (g) the ongoing process established to identify the educational requirements and skills necessary for the administrator to perform their duties in relation to the plan;

• (h) the material risks that apply to the plan and the internal controls established to manage those risks; and

• (i) the process established for the resolution of disputes involving members or other persons who are entitled to benefits under the plan.

Application for Registration

• 11 (1) An application for the registration of a plan shall include

  • (a) a copy of the plan, insurance contract, trust agreement, resolution, collective agreement on pensions, by-law and any other document that creates or supports the plan, the pension fund and any amendments to them;

  • (b) a copy of a written explanation referred to in subparagraph 28(1)(a)(i) of the Act;

  • (c) a cost certificate, prepared as of the effective date of the plan or, if a cost certificate has been prepared as of a date more recent than the effective date of the plan, the most recent cost certificate, in the case of

    • (i) a defined contribution plan where the contributions under the plan are allocated to individual plan members, and

    • (ii) a defined benefit plan that is an insured plan;

  • (d) an actuarial report, in the case of a plan, other than a plan described in paragraph (c), prepared as of the effective date of the plan or, if an actuarial report has been prepared as of a date more recent than the effective date of the plan, the most recent actuarial report;

  • (e) a written statement, signed by the administrator, as to whether a statement of investment policies and procedures referred to in subsection 7.1(1) has been established.

  • (f) [Repealed, SOR/2011-196, s. 31]

  • (g) [Repealed, SOR/2015-60, s. 4]

• (2) A cost certificate referred to in paragraph (1)(c) shall be prepared by an actuary, accountant or other professional adviser and shall include

  • (a) the estimated cost of benefits under the plan and the contributions to the plan, showing separately employer and plan member contributions during the plan year in respect of which the cost certificate is prepared; and

  • (b) the formula for computing the cost of benefits, showing the formula for allocating the cost between the employer and the plan members for subsequent plan years.

• (3) An actuarial report referred to in paragraph (1)(d) shall be prepared by an actuary in accordance with the Standard of Practice for Valuation of Pension Plans published by the Canadian Institute of Actuaries in January 1994, as amended from time to time and shall include

  • (a) the estimated cost of benefits under the plan, showing separately employer and plan member contributions in respect of service

    • (i) for the plan year following the date as of which the report is prepared, where that date falls on the last day of a plan year, and

    • (ii) for the plan year in which the date as of which the report is prepared falls, where that date falls on any other day of a plan year;

  • (b) the formula for computing the cost of benefits, showing the formula for allocating the cost between the employer and the plan members in respect of service for that plan year and subsequent plan years;

  • (c) the outstanding amount of unfunded liabilities existing on the date as of which the report is prepared and the special payments to be made in accordance with paragraph 9(4)(b);

  • (d) a certification that the plan does not have a solvency deficiency or a determination of the solvency deficiency of the plan and the special payments to be made in accordance with paragraph 9(4)(c); and

  • (e) the solvency ratio of the plan and the method to be used to calculate the solvency ratio of the plan for the succeeding three plan years.

• (4) Any actuarial report referred to in paragraph (1)(d) that is prepared in respect of a negotiated contribution plan shall, if the funding of the plan fails to meet the standards of solvency referred to in section 8, contain the options available in respect of such funding that would result in the funding of the plan meeting the standards for solvency.

• (5) Where an actuarial report referred to in paragraph (1)(d) is prepared in respect of a plan that provides benefits based on a rate of remuneration at the date of commencement of the payment of the pension benefit or on an average of the rates of remuneration over a specified and limited period, the current remuneration of each plan member shall be projected to estimate the remuneration on which the pension benefits payable at retirement will be based.

• (6) Where an actuarial report referred to in paragraph (1)(d) is prepared in respect of a plan that provides for an increase in pension benefits after cessation of membership or after retirement, the actuarial report shall take into account the value of the increase in determining the value of pension benefits under the plan.

11.1 [Repealed, SOR/2015-60, s. 5]

11.2 [Repealed, SOR/2015-60, s. 5]

11.3 [Repealed, SOR/2015-60, s. 5]

Reporting

• 12 (1) An information return required under subsection 12(1) of the Act to be filed annually shall contain information in respect of a plan that is related to that plan year.

• (2) An information return required under subsection 12(1) of the Act to be filed other than annually shall contain all the information in respect of a plan relating to that portion of a plan year up to and including the date on which the information return is prepared.

13 An information return referred to in subsection 12(1) of the Act shall contain the information set out in Form 2 of Schedule II.

• 14 (1) The Superintendent shall require an administrator to file a cost certificate, prepared by an actuary, accountant or other professional advisor as of the effective date of an amendment to the plan that alters the cost of benefits under the plan or alters the contributions to the plan, in the case of

  • (a) a defined contribution plan where the contributions under the plan are allocated to individual plan members; and

  • (b) a defined benefit plan that is an insured plan.

• (2) A cost certificate referred to in subsection (1) shall include

  • (a) the estimated cost of benefits under the plan and the contributions to the plan, showing separately employer and plan member contributions

    • (i) for the plan year following the effective date of the amendment, where the effective date falls on the last day of the plan year, or

    • (ii) for the plan year in which the effective date of the amendment falls, where the effective date falls on any other day of the plan year; and

  • (b) the formula for computing the cost of benefits, showing the formula for allocating the cost between the employer and the plan members for subsequent plan years.

• 15 (1) The Superintendent may require the administrator to file, at such intervals or times as the Superintendent directs,

  • (a) subject to subsection (2), a list of assets held by the plan on the date directed by the Superintendent, showing

    • (i) the book value of each asset,

    • (ii) the market value of each asset, and

    • (iii) such information as will permit the verification of the market value attributed to an asset and the determination of whether the requirements of section 6 have been met;

  • (b) an appraisal that will permit the verification of the market value attributed to an asset held by the plan;

  • (c) if the plan is not an insured plan,

    • (i) a financial statement of the pension fund,

    • (ii) any information that the Handbook of the Canadian Institute of Chartered Accountants requires to be set out in a financial statement of a pension plan, and

    • (iii) an auditor’s report of the pension fund;

  • (d) information concerning the investments of the pension fund, including the information set out in Form 2.1 of Schedule II;

  • (e) any information relating to the determination of the solvency and funding status of a pension plan;

  • (f) the location of any books, records or other documents relating to a pension plan or to any securities, obligations or other investments in which pension fund money is invested;

  • (g) the name of the collective bargaining agent, if any, who represents the pension plan members;

  • (h) the information necessary to identify the employers who participate in or who have ceased participation in the plan;

  • (i) a certificate of the administrator or any person preparing, compiling or filing any information on behalf of the administrator that certifies that the information submitted to the Superintendent is accurate;

  • (j) a record of, or any other document evidencing, any operating expenses paid from the plan fund or that are due or accrued from the plan fund, including the names of any payees, the purpose and amounts of any payments made or to be made to each payee, including the aggregate amounts; and

  • (k) a record of, or any other document evidencing, all direct and indirect compensation that a person received or that is due or accrued in relation to any service provided by the person in respect of the plan.

• (2) A list of assets is not required in respect of a plan under which benefits are provided through

  • (a) a contract issued by a person authorized to carry on a life insurance business in Canada, other than a contract in respect of which separate and distinct funds are maintained by the person; or

  • (b) a contract issued by the Government of Canada.

Refund of Surplus

• 16 (1) For the purposes of the definition surplus in subsection 2(1) of the Act, the amount by which the assets of the plan exceeds its liabilities shall be determined by subtracting the liabilities of the plan from its assets, as those assets and liabilities are shown in an actuarial report and, in the case of a plan that has not been fully terminated, as those assets and liabilities are valued in the report according to a going concern valuation.

• (2) A refund of all or part of a surplus may be made if

  • (a) in respect of a plan that has not been fully terminated, the surplus exceeds the greater of the following amounts that are attributable to the defined benefit provisions of the plan, namely,

    • (i) two times the employer’s contribution to the normal cost of the plan, and

    • (ii) 25% of the liabilities of the plan, determined according to a solvency valuation;

  • (b) the administrator of the plan has given notice in writing to the plan members, former members and any other person who is entitled to a pension benefit under the terms of the plan that the employer intends to withdraw all or part of the surplus and that they may make any comments in writing to the Superintendent concerning the refund;

  • (c) 30 days have gone by after the day on which the administrator gave notice under paragraph (b);

  • (d) the Superintendent has consented to the refund of all or part of the surplus and has given notice of that consent in writing to the persons referred to in paragraph (b) who made comments in writing concerning the refund; and

  • (e) 40 days have gone by after the day on which the Superintendent gave notice under paragraph (d).

• (3) For the purpose of this section, liabilities accrued under the defined contribution provisions of a plan as the result of a conversion of defined benefit provisions to defined contribution provisions are deemed not to be attributable to the defined benefit provisions of the plan.

• (4) In respect of a plan that has not been fully terminated, the surplus or part of it that may be refunded may be no greater than the amount by which the surplus exceeds the greater of the following amounts that are attributable to the defined benefit provisions of the plan:

  • (a) two times the employer’s contribution to the normal cost of the plan, and

  • (b) 25% of the liabilities of the plan, determined according to a solvency valuation.

• (5) The following classes of persons are prescribed for the purpose of paragraph 9.2(3)(b) of the Act:

  • (a) any persons who are entitled to pension benefits payable from the plan, but not including plan members;

  • (b) survivors, spouses, former spouses, common-law partners and former common-law partners of members or former members if the survivor, spouse, former spouse, common-law partner or former common-law partner is entitled to pension benefits or pension benefit credits payable from the plan; and

  • (c) any persons for whom the administrator has purchased annuities, other than life annuities purchased under section 26 of the Act, but not including plan members.

• 16.1 (1) An employer shall notify the persons referred to in paragraph 9.2(3)(a) of the Act of the employer’s proposal for a refund of a surplus or part of it by sending a notice to the current address of the person or, if the person is an employee, to their place of work.

• (2) An employer shall notify the persons referred to in paragraph 9.2(3)(b) of the Act of the employer’s proposal for a refund of a surplus or part of it

  • (a) by sending a notice to the person at their current address contained in the employer’s records or at the address the employer reasonably believes to be their current address; or

  • (b) if the address of the person is unknown, by publishing a notice, in both official languages, once a week for two consecutive weeks, in one or more newspapers in general circulation in each province.

Arbitration Relating to Refund of Surplus

• 16.2 (1) An arbitration under subsection 9.2(4) of the Act shall include procedures by which

  • (a) unionized members can make written representations to the executive of their union; and

  • (b) any person, other than a person described in paragraph (a), who is described in subsection 9.2(3) of the Act can make written representations to the arbitrator.

• (2) For the purposes of subsection 9.2(7) of the Act, the prescribed period is one year beginning on the day on which the employer notifies the Superintendent and persons referred to in subsection 9.2(3) of the Act in accordance with subsection 9.2(4) or (5) of the Act, as the case may be.

• (3) The arbitrator shall publish a notice of the date, time and place at which the arbitration will begin.

• (4) The notice must include

  • (a) the mailing address from where the persons referred to in subsection 9.2(3) of the Act can obtain a copy of the procedures for the arbitration; and

  • (b) the mailing address where those persons may send their written representations.

• (5) The notice must be published, in both official languages, once a week for two consecutive weeks, in one or more newspapers in general circulation in each province in which persons referred to in subsection 9.2(3) of the Act reside or, if a person’s province of residence is not known, in each province.

• (6) The last notice must be published not more than eight weeks and not less than four weeks before the day on which the arbitration begins.

Indexation

17 The annual increase of the Consumer Price Index referred to in paragraph 21(6)(b) of the Act is the ratio of the aggregate of the Consumer Price Index for a current period of 12 consecutive months prior to the end of a plan year, or prior to the date the deferred pension benefit is adjusted as specified in the plan, if that date is other than the end of the plan year, to the aggregate of the Consumer Price Index for a corresponding period one year earlier, minus one.

Portability of Pension Benefit Credits

• 18 (1) Subject to subsection (2), a pension benefit credit shall be determined in accordance with the Recommendations for the Computation of Transfer Values from Registered Pension Plans effective September 1, 1993 issued by the Canadian Institute of Actuaries, as amended from time to time.

• (2) In the case of a defined contribution plan, where the contributions under the plan are allocated to an individual plan member, the pension benefit credit of a plan member or the survivor of a plan member shall be the value of the accumulated contributions made under the plan by or in respect of the plan member since the plan member became a plan member.

• (3) A plan member or the survivor of a plan member who wishes to transfer the pension benefit credit of the plan member or the survivor shall notify the administrator thereof in the form set out in Form 3 of Schedule II.

• (3.1) The consent referred to in subsection 26(2.1) of the Act shall be in Form 3.1 of Schedule II.

• (4) A pension benefit credit shall be determined

  • (a) where a plan member retires or dies or the whole or part of the plan is terminated, as of the date of the retirement, death or termination;

  • (b) where a plan member ceases to be a plan member, as of the date that the plan member ceases to be a plan member; and

  • (c) where a plan member makes an assignment under subsection 25(4) of the Act, on the effective date of the assignment.

• 19 (1) Where a plan has a solvency ratio that is less than one, any amount transferred out of the pension fund shall be considered to impair the solvency of the pension fund.

• (2) Where a plan has a solvency ratio that is equal to one, any amount transferred out of the pension fund that would result in the plan having a solvency ratio of less than one shall be considered to impair the solvency of the pension fund.

19.1 For the purposes of sections 16.4 and 26 of the Act, a life income fund, a restricted life income fund and a locked-in registered retirement savings plan are retirement savings plans into which a pension benefit credit may be transferred.

• 20 (1) A locked-in registered retirement savings plan shall provide that

  • (a) the funds may only be

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

    • (ii) transferred to a plan, including any pension plan referred to in subsection 26(5) of the Act, if the plan permits such a transfer and if the plan administers the benefit attributed to the transferred funds as if the benefit were that of a plan member with two years of membership in the plan,

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

    • (iv) transferred to a life income fund or to a restricted life income fund;

  • (b) on the death of the holder of the locked-in registered retirement savings plan, the funds shall be paid to the survivor of the holder by

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

    • (ii) transferring the funds to a plan, including any pension plan referred to in subsection 26(5) of the Act, if the plan permits such a transfer and if the plan administers the benefit attributed to the transferred funds as if the benefit were that of a plan member with two years membership in the plan,

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

    • (iv) transferring the funds to a life income fund or to a restricted life income fund;

  • (c) except as provided in subsection 25(4) of the Act, the funds shall not be assigned, charged, anticipated or given as security and any transaction purporting to assign, charge, anticipate or give the funds as security is void;

  • (d) the holder of the locked-in registered retirement savings plan may withdraw an amount from that plan up to the lesser of the amount determined by the formula set out in subsection (1.1) and 50% of the Year’s Maximum Pensionable Earnings minus any amount withdrawn in the calendar year under this paragraph — from any locked-in registered retirement savings plan — or under paragraph 20.1(1)(m), 20.2(1)(e) or 20.3(1)(m)

    • (i) if the holder certifies that the holder has not made a withdrawal in the calendar year under this paragraph — from any locked-in registered retirement savings plan — or under paragraph 20.1(1)(m), 20.2(1)(e) or 20.3(1)(m) other than within the last 30 days before this certification,

    • (ii) if, in the event that the value of M in subsection (1.1) is greater than zero,

      • (A) the holder certifies that the holder expects to make expenditures on medical or disability-related treatment or adaptive technology for the calendar year in excess of 20% of the holder’s total expected income for that calendar year determined in accordance with the Income Tax Act, excluding withdrawals in the calendar year under this paragraph — from any locked-in registered retirement savings plan — or under paragraph 20.1(1)(m), 20.2(1)(e) or 20.3(1)(m), and

      • (B) a physician certifies that such medical or disability-related treatment or adaptive technology is required, and

    • (iii) if the holder gives a copy of Form 1 and Form 2 of Schedule V to the financial institution with whom the contract or arrangement for the locked-in registered retirement savings plan was entered into;

  • (e) the holder of the locked-in registered retirement savings plan who has ceased to be a resident of Canada for at least two years may withdraw any amount from that plan; and

  • (f) in the calendar year in which the holder of the locked-in registered retirement savings plan reaches 55 years of age or in any subsequent calendar year, the funds may be paid to the holder in a lump sum if

    • (i) the holder certifies that the total value of all assets in all locked-in registered retirement savings plans, life income funds, restricted locked-in savings plans and restricted life income funds that were created as a result of a transfer of pension benefit credits under section 16.4 or 26 of the Act, a transfer under these Regulations or a transfer under section 50, 53 or 54 of the Pooled Registered Pension Plans Act or Pooled Registered Pension Plans Regulations, is less than or equal to 50% of the Year’s Maximum Pensionable Earnings, and

    • (ii) the holder gives a copy of Form 2 and Form 3 of Schedule V to the financial institution with whom the contract or arrangement for the locked-in registered retirement savings plan was entered into.

• (1.1) The amount referred to in paragraph (1)(d), 20.1(1)(m), 20.2(1)(e) or 20.3(1)(m) is determined by the following formula:

  M + N

  where

  M

  is the total amount of the expenditures that the holder expects to make on medical or disability-related treatment or adaptive technology for the calendar year, and

  N

  is the greater of zero and the amount determined by the formula

  P - Q

  where

  P

  is 50% of the Year’s Maximum Pensionable Earnings, and

  Q

  is two thirds of the holder’s total expected income for the calendar year determined in accordance with the Income Tax Act, excluding withdrawals in the calendar year under paragraph (1)(d), 20.1(1)(m), 20.2(1)(e) or 20.3(1)(m).

• (2) Where a pension benefit credit transferred into a locked-in registered retirement savings plan was not varied according to the sex of the plan member, an immediate life annuity or a deferred life annuity purchased by the funds accumulated in the locked-in registered retirement savings plan shall not differentiate as to sex.

• (3) A locked-in registered retirement savings plan shall contain a statement as to whether or not the pension benefit credit transferred pursuant to section 26 of the Act was varied according to the sex of the plan member.

• (4) A locked-in registered retirement savings plan shall provide that, where a physician certifies that owing to mental or physical disability the life expectancy of the holder of the plan is likely to be shortened considerably, the funds may be paid to the holder in a lump sum.

• (5) The contract or arrangement establishing a locked-in registered retirement savings plan shall set out the method of determining the value of the plan, including the valuation method used to establish its value on the death of the holder of the plan or on the transfer of assets from the plan.

• 20.1 (1) The contract or arrangement establishing a life income fund shall

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

  • (b) provide that the holder of the life income fund shall, at the beginning of each calendar year or at any other time agreed on 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;

  • (c) provide 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 shall be paid out of the life income fund in that year;

  • (d) provide 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 shall not exceed the amount determined by the formula

    C/F

    where

    C

    is the balance in the life income fund

    • (i) at the beginning of the calendar year, or

    • (ii) if the amount determined in subparagraph (i) is zero, at the date when the initial amount was 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

    • (i) 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 month of November before the beginning of the calendar year, and

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

  • (d.1) provide 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 shall not exceed the value of the funds held in the fund immediately before the time of the payment;

  • (e) provide that, for the calendar year in which the contract or arrangement was entered into, the amount determined under paragraph (d) or (d.1), as the case may be, shall 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;

  • (f) provide that if, at the time 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 determined under paragraph (d) or (d.1), as the case may be, is deemed to be zero in respect of that part of the life income fund for that calendar year;

  • (g) provide that the funds in the life income fund may only be

    • (i) transferred to another life income fund or to a restricted life income fund,

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

    • (iii) used to purchase an immediate life annuity or a deferred life annuity;

  • (h) [Repealed, SOR/2006-208, s. 1]

  • (i) provide that, on the death of the holder of the life income fund, the funds in the life income fund shall be paid to the survivor of the holder by

    • (i) transferring the funds to another life income fund or to a restricted life income fund,

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

    • (iii) transferring the funds to a locked-in registered retirement savings plan;

  • (j) provide that, subject to subsection 25(4) of the Act, the funds in the life income fund shall not be assigned, charged, anticipated or given as security and that any transaction purporting to assign, charge, anticipate or give the funds as security is void;

  • (k) state whether or not any pension benefit credit transferred pursuant to section 26 of the Act was varied according to the sex of the plan member;

  • (l) provide that, in the calendar year in which the holder of the life income fund reaches 55 years of age or in any subsequent calendar year, the funds may be paid to the holder in a lump sum if

    • (i) the holder certifies that the total value of all assets in all locked-in registered retirement savings plans, life income funds, restricted locked-in savings plans and restricted life income funds that were created as a result of a transfer of pension benefit credits under section 16.4 or 26 of the Act, a transfer under these Regulations or a transfer under section 50, 53 or 54 of the Pooled Registered Pension Plans Act or Pooled Registered Pension Plans Regulations, is less than or equal to 50% of the Year’s Maximum Pensionable Earnings, and

    • (ii) if the holder gives a copy of Form 2 and Form 3 of Schedule V to the financial institution with whom the contract or arrangement for the life income fund was entered into;

  • (m) provide that the holder of the life income fund may withdraw an amount from that fund up to the lesser of the amount determined by the formula set out in subsection 20(1.1) and 50% of the Year’s Maximum Pensionable Earnings minus any amount withdrawn in the calendar year under this paragraph — from any life income fund — or under paragraph 20(1)(d), 20.2(1)(e) or 20.3(1)(m)

    • (i) if the holder certifies that the holder has not made a withdrawal in the calendar year under this paragraph — from any life income fund — or under paragraph 20(1)(d), 20.2(1)(e) or 20.3(1)(m) other than within the last 30 days before this certification,

    • (ii) if, in the event that the value of M in subsection 20(1.1) is greater than zero,

      • (A) the holder certifies that the holder expects to make expenditures on medical or disability-related treatment or adaptive technology for the calendar year in excess of 20% of the holder’s total expected income for that calendar year determined in accordance with the Income Tax Act, excluding withdrawals in the calendar year under this paragraph — from any life income fund — or under paragraph 20(1)(d), 20.2(1)(e) or 20.3(1)(m), and

      • (B) a physician certifies that such medical or disability-related treatment or adaptive technology is required, and

    • (iii) if the holder gives a copy of Form 1 and Form 2 of Schedule V to the financial institution with whom the contract or arrangement for the life income fund was entered into; and

  • (n) provide that the holder of the life income fund who has ceased to be a resident of Canada for at least two years may withdraw any amount from that fund.

• (2) Where a pension benefit credit transferred to a life income fund was 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 shall not differentiate as to sex.

• (3) A life income fund shall provide that, where a physician certifies that, owing to mental or physical disability, the life expectancy of the holder of the life income fund is likely to be shortened considerably, the funds in the life income fund may be paid to the holder in a lump sum.

• 20.2 (1) A restricted locked-in savings plan shall provide that

  • (a) the funds may only be

    • (i) transferred to another restricted locked-in savings plan,

    • (ii) transferred to a plan, including any pension plan referred to in subsection 26(5) of the Act, if the plan permits such a transfer and if the plan administers the benefit attributed to the transferred funds as if the benefit were that of a plan member with two years’ membership in the plan,

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

    • (iv) transferred to a restricted life income fund;

  • (b) on the death of the holder of the restricted locked-in savings plan, the funds shall be paid to the survivor of the holder by

    • (i) transferring the funds to another restricted locked-in savings plan or to a locked-in registered retirement savings plan,

    • (ii) transferring the funds to a plan, including any pension plan referred to in subsection 26(5) of the Act, if the plan permits such a transfer and if the plan administers the benefit attributed to the transferred funds as if the benefit were that of a plan member with two years’ membership in the plan,

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

    • (iv) transferring the funds to a life income fund or to a restricted life income fund;

  • (c) except as provided in subsection 25(4) of the Act, the funds shall not be assigned, charged, anticipated or given as security and any transaction purporting to assign, charge, anticipate or give the funds as security is void;

  • (d) in the calendar year in which the holder of the restricted locked-in savings plan reaches 55 years of age or in any subsequent calendar year, the funds may be paid to the holder in a lump sum if

    • (i) the holder certifies that the total value of all assets in all locked-in registered retirement savings plans, life income funds, restricted locked-in savings plans and restricted life income funds that were created as a result of the transfer of pension benefit credits under section 16.4 or 26 of the Act, a transfer under these Regulations or a transfer under section 50, 53 or 54 of the Pooled Registered Pension Plans Act or the Pooled Registered Pension Plans Regulations, is less than or equal to 50% of the Year’s Maximum Pensionable Earnings, and

    • (ii) if the holder gives a copy of Form 2 and Form 3 of Schedule V to the financial institution with whom the contract or arrangement for the restricted locked-in savings plan was entered into;

  • (e) the holder of the restricted locked-in savings plan may withdraw an amount from that plan up to the lesser of the amount determined by the formula set out in subsection 20(1.1) and 50% of the Year’s Maximum Pensionable Earnings minus any amount withdrawn in the calendar year under this paragraph — from any restricted locked-in savings plan — or under paragraph 20(1)(d), 20.1(1)(m) or 20.3(1)(m)

    • (i) if the holder certifies that the holder has not made a withdrawal in the calendar year under this paragraph — from any restricted locked-in savings plan — or under paragraph 20(1)(d), 20.1(1)(m) or 20.3(1)(m) other than within the last 30 days before this certification,

    • (ii) if, in the event that the value of M in subsection 20(1.1) is greater than zero,

      • (A) the holder certifies that the holder expects to make expenditures on medical or disability-related treatment or adaptive technology for the calendar year in excess of 20% of the holder’s total expected income for that calendar year determined in accordance with the Income Tax Act, excluding withdrawals in the calendar year under this paragraph — from any restricted locked-in savings plan — or under paragraph 20(1)(d), 20.1(1)(m) or 20.3(1)(m), and

      • (B) a physician certifies that such medical or disability-related treatment or adaptive technology is required, and

    • (iii) if the holder gives a copy of Form 1 and Form 2 of Schedule V to the financial institution with whom the contract or arrangement for the restricted locked-in savings plan was entered into; and

  • (f) the holder of the restricted locked-in savings plan who has ceased to be a resident of Canada for at least two years may withdraw any amount from that plan.

• (2) If a pension benefit credit transferred into a restricted locked-in savings plan was not varied according to the sex of the plan member, an immediate life annuity or a deferred life annuity purchased with funds accumulated in the plan shall not differentiate as to sex.

• (3) A restricted locked-in savings plan shall contain a statement as to whether or not the pension benefit credit transferred under section 26 of the Act was varied according to the sex of the plan member.

• (4) A restricted locked-in savings plan shall provide that, if a physician certifies that owing to mental or physical disability the life expectancy of the holder of the plan is likely to be shortened considerably, the funds may be paid to the holder in a lump sum.

• (5) The contract or arrangement establishing a restricted locked-in savings plan shall set out the method of determining the value of the plan, including the valuation method used to establish its value on the death of the holder of the plan or on the transfer of assets from the plan.

• 20.3 (1) The contract or arrangement establishing a restricted life income fund shall

  • (a) set out the method of determining the value of the restricted life income fund, including the valuation method used to establish its value on the death of the holder of the fund or on the transfer of assets from the fund;

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

  • (c) provide that, in the event that the holder of the restricted life income fund does not decide the amount to be paid out of the fund in a calendar year, the minimum amount determined in accordance with the Income Tax Act shall be paid out in that year;

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

    C/F

    where

    C

    is the balance in the restricted life income fund

    • (i) at the beginning of the calendar year, or

    • (ii) if the amount determined under subparagraph (i) is zero, on the day on which the initial amount is transferred into the fund; and

    F

    is the value, at the beginning of the calendar year, of a pension benefit whose 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,

    • (i) for the first 15 years after January 1 of the year in which the restricted 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 month of November before the beginning of the calendar year, and

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

  • (e) provide that, for the calendar year in which the holder of the restricted life income fund reaches 90 years of age and for all subsequent calendar years, the amount of income paid out of the fund shall not exceed the value of the funds held in the fund immediately before the time of the payment;

  • (f) provide that, for the calendar year in which the contract or arrangement was entered into, the amount determined under paragraph (d) or (e), as the case may be, shall 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;

  • (g) provide that if, at the time the restricted life income fund was established, part of the fund was composed of funds that had been held in another restricted life income fund of the holder earlier in the calendar year in which the fund was established, the amount determined under paragraph (d) or (e), as the case may be, is deemed to be zero in respect of that part of the fund for that calendar year;

  • (h) provide that the funds in the restricted life income fund may only be

    • (i) transferred to another restricted life income fund,

    • (ii) transferred to a restricted locked-in savings plan, or

    • (iii) used to purchase an immediate life annuity or a deferred life annuity;

  • (i) provide that, on the death of the holder of the restricted life income fund, the funds in that fund shall be paid to the survivor of the holder by

    • (i) transferring the funds to another restricted life income fund or to a life income fund,

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

    • (iii) using the funds to purchase an immediate life annuity or a deferred life annuity;

  • (j) provide that, except as provided in subsection 25(4) of the Act, the funds in the restricted life income fund shall not be assigned, charged, anticipated or given as security and that any transaction purporting to assign, charge, anticipate or give the funds as security is void;

  • (k) state whether or not any pension benefit credit transferred under section 26 of the Act was varied according to the sex of the plan member;

  • (l) provide that, in the calendar year in which the holder of the restricted life income fund reaches 55 years of age or in any subsequent calendar year, the funds may be paid to the holder in a lump sum if

    • (i) the holder certifies that the total value of all assets in all locked-in registered retirement savings plans, life income funds, restricted locked-in savings plans and restricted life income funds that were created as a result of the transfer of pension benefit credits under section 16.4 or 26 of the Act, a transfer under these Regulations or a transfer under section 50, 53 or 54 of the Pooled Registered Pension Plans Act or the Pooled Registered Pension Plans Regulations, is less than or equal to 50% of the Year’s Maximum Pensionable Earnings, and

    • (ii) if the holder gives a copy of Form 2 and Form 3 of Schedule V to the financial institution with whom the contract or arrangement for the restricted life income fund was entered into;

  • (m) provide that the holder of the restricted life income fund may withdraw an amount from that fund up to the lesser of the amount determined by the formula set out in subsection 20(1.1) and 50% of the Year’s Maximum Pensionable Earnings minus any amount withdrawn in the calendar year under this paragraph — from any restricted life income fund — or under paragraph 20(1)(d), 20.1(1)(m) or 20.2(1)(e)

    • (i) if the holder certifies that the holder has not made a withdrawal in the calendar year under this paragraph — from any restricted life income fund — or under paragraph 20(1)(d), 20.1(1)(m) or 20.2(1)(e) other than within the last 30 days before this certification,

    • (ii) if, in the event that the value of M in subsection 20(1.1) is greater than zero,

      • (A) the holder certifies that the holder expects to make expenditures on medical or disability-related treatment or adaptive technology for the calendar year in excess of 20% of the holder’s total expected income for that calendar year determined in accordance with the Income Tax Act, excluding withdrawals in the calendar year under this paragraph — from any restricted life income fund — or under paragraph 20(1)(d), 20.1(1)(m) or 20.2(1)(e), and

      • (B) a physician certifies that such medical or disability-related treatment or adaptive technology is required, and

    • (iii) if the holder gives a copy of Form 1 and Form 2 of Schedule V to the financial institution with whom the contract or arrangement for the restricted life income fund was entered into;

  • (n) provide that, if the restricted life income fund is established in the calendar year in which the holder of the fund reaches 55 years of age or in any subsequent calendar year, the holder of the fund may transfer 50% of the funds in that fund to a registered retirement savings plan or a registered retirement income fund within 60 days after the establishment of the restricted life income fund if

    • (i) the restricted life income fund was created as the result of the transfer of a pension benefit credit under section 16.4 or 26 of the Act or a transfer from a locked-in registered retirement savings plan, a life income fund or a PRPP, and

    • (ii) if the holder gives a copy of Form 2 of Schedule V to the financial institution with whom the contract or arrangement for the restricted life income fund was entered into; and

  • (o) provide that the holder of the restricted life income fund who has ceased to be a resident of Canada for at least two years may withdraw any amount from that fund.

• (2) If a pension benefit credit transferred to a restricted life income fund was not varied according to the sex of the plan member, an immediate life annuity or a deferred life annuity purchased with funds accumulated in the fund shall not differentiate as to sex.

• (3) A restricted life income fund shall provide that, if a physician certifies that owing to mental or physical disability the life expectancy of the holder of the fund is likely to be shortened considerably, the funds in that fund may be paid to the holder in a lump sum.

• 21 (1) For the purposes of paragraphs 26(1)(c) and (2)(c) and subparagraphs 26(3)(a)(iii) and (b)(iii) of the Act, an immediate life annuity or a deferred life annuity that is purchased with a pension benefit credit or with the funds of a locked-in registered retirement savings plan, a restricted locked-in savings plan, a life income fund or a restricted life income fund shall provide that

  • (a) except as provided in subsection 25(4) of the Act, no benefit provided under the annuity shall be assigned, charged, anticipated or given as security and any transaction purporting to assign, charge, anticipate or give the benefit as security is void;

  • (b) except in the case of the unexpired period of a guaranteed annuity where the annuitant is deceased, no benefit provided under the annuity shall be surrendered or commuted during the lifetime of the annuitant or the spouse or common-law partner of the annuitant and any transaction purporting to surrender or commute such a benefit is void; and

  • (c) where the annuitant has a spouse or common-law partner at the time that annuity benefits commence to be paid, the annuity benefit shall be paid in the form of a joint and survivor pension benefit, subject to the provisions of section 22 of the Act.

• (2) A deferred life annuity referred to in subsection (1) that is purchased with a pension benefit credit or with the funds of a locked-in registered retirement savings plan, a restricted locked-in savings plan, a life income fund or a restricted life income fund shall provide that

  • (a) if the annuitant dies prior to the time that the annuity payments commence, the survivor is entitled, on the death of the annuitant, to an amount equal to the commuted value of the deferred life annuity; and

  • (b) any amount to which the survivor is entitled shall be

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

    • (ii) transferred to a plan, including any pension plan referred to in subsection 26(5) of the Act, if the plan permits such a transfer and administers the benefit attributed to the transferred funds as if the benefit were that of a plan member with two years of membership in the plan,

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

    • (iv) transferred to a life income fund or to a restricted life income fund.

• (3) [Repealed, SOR/95-551, s. 5]

• (4) For the purposes of subsection (2), the commuted value of the deferred life annuity shall be determined in accordance with the Recommendations for the Computation of Transfer Values from Registered Pension Plans effective September 1, 1993 issued by the Canadian Institute of Actuaries, as amended from time to time.

Variable Benefit

• 21.1 (1) A member or former member who has elected to receive a variable benefit may decide the amount that they are to receive as a variable benefit for any calendar year.

• (2) The variable benefit shall be not less than the minimum amount determined under subsection 8506(5) of the Income Tax Regulations and, for any calendar year before the year in which the former member or their survivor, as the case may be, reaches 90 years of age, not more than the amount determined by the formula

  C/F

  where

  C

  is the balance in the former member’s account

  • (a) at the beginning of the calendar year, or

  • (b) if the balance at the beginning of the calendar year is zero, on the day on which the election was made; and

  F

  is the value, 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 member, former member or their survivor, as the case may be, reaches 90 years of age, established using an interest rate that is

  • (a) for each of the first 15 years, not more than the monthly average yield on Government of Canada marketable bonds of maturity over 10 years, as published by the Bank of Canada, for the month of November before the beginning of the calendar year, and

  • (b) for any subsequent year, not more than 6%.

• (3) For the calendar year in which the former member or their survivor, as the case may be, reaches 90 years of age and for all subsequent calendar years, the amount of the variable benefit shall not exceed the value of the funds held in the fund immediately before the time of the payment.

• (4) The minimum amount determined under subsection 8506(5) of the Income Tax Regulations shall be paid as a variable benefit for a calendar year if

  • (a) the member or former member or their survivor, as the case may be, has not notified the administrator of the amount to be paid as a variable benefit for a calendar year by the beginning of that year, or

  • (b) the amount determined by the formula set out in subsection (2) for that year is less than that minimum amount.

• (5) If, for the calendar year in which the variable benefit is established, part of the account was composed of funds that had been held in a life income fund of the holder earlier in the calendar year in which the variable benefit was established, the amount determined by the formula set out in subsection (2) and the value of the funds referred to in subsection (3) is deemed to be zero in respect of that part of the account for that calendar year.

• (6) For the first calendar year that the variable benefit is paid, the amount to be paid shall 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.

Information to Be Provided

22 The written explanation, information and written statement to be provided pursuant to paragraphs 28(1)(a) and (b) of the Act shall be addressed to the plan member or the employee and that person’s spouse or common-law partner as shown on the records of the administrator and shall be

• (a) given to the plan member or the employee at the place of employment; or

• (b) mailed to the residence of the plan member or employee.

22.1 For the purpose of subparagraph 28(1)(a)(ii) of the Act, the written explanation shall include, in the case of a negotiated contribution plan, a description of the funding arrangement, including an indication that

• (a) pension benefits or pension benefit credits may need to be reduced if negotiated contributions are insufficient to meet the funding requirements under the Act; and

• (b) the administrator may amend the plan to reduce, subject to the Superintendent’s authorization, pension benefits or pension benefit credits.

• 23 (1) The written statement to be provided in accordance with paragraph 28(1)(b) of the Act shall include

  • (a) the name of the plan member;

  • (b) the period to which the statement applies;

  • (c) the date of birth of the plan member;

  • (d) the period that has been credited to the plan member for the purpose of calculating the pension benefit of the plan member;

  • (e) the date on which the plan member attains pensionable age;

  • (f) the date on which the plan member is first entitled to an immediate pension benefit pursuant to subsection 16(2) of the Act;

  • (g) the name of the spouse or common-law partner of the plan member listed on the records of the administrator;

  • (h) the name of any person on the records of the administrator designated as the beneficiary of the pension benefit of the member;

  • (i) the additional voluntary contributions of the plan member made for the plan year and the accumulated additional voluntary contributions of the plan member as of the end of the plan year;

  • (j) the required contributions of the plan member made for the plan year and the accumulated required contributions of the plan member as of the end of the plan year;

  • (k) in the case of a plan with a defined contribution provision, the contributions of the employer in respect of the plan member made for the plan year and the accumulated contributions of the employer in respect of the plan member as of the end of the plan year;

  • (l) the amount of any funds transferred to the plan in respect of the plan member and the benefit under the plan attributable to that amount or the length of service credited to the plan member in respect of that amount;

  • (m) in the case of a plan other than a defined contribution plan,

    • (i) the annual amount of the pension benefit accrued in respect of the plan member at the end of the plan year and payable at pensionable age,

    • (ii) the total value of solvency assets and solvency liabilities of the plan on the valuation date, and

    • (iii) the total employer payments made to the plan for the plan year;

  • (n) if applicable, the interest rates credited to the contributions of the plan member for the plan year;

  • (o) the benefit payable on the death of the plan member and the extent to which that benefit would be reduced by a payment under a group life insurance plan;

  • (p) a statement setting out the right to access the documents described in paragraph 28(1)(c) of the Act;

  • (q) in respect of the defined benefit provisions of an uninsured defined benefit plan,

    • (i) if the ratio as calculated in accordance with paragraph (b) of the definition solvency ratio in subsection 2(1) is less than one,

      • (A) the value and description of the ratio, the valuation date and the date of the next valuation,

      • (B) except in the case of a negotiated contribution plan, a description of the measures the administrator has implemented or will implement to bring that ratio to one, and

      • (C) the extent to which the member’s benefit would be reduced if the plan were terminated and wound up with that solvency ratio; and

    • (ii) in any other case, the value and description of the ratio, the valuation date and the date of the next valuation;

  • (r) for the assets of a plan that are not held in respect of member choice accounts,

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

    • (ii) the target asset allocation expressed as a percentage of the total assets; and

  • (s) in the case of a negotiated contribution plan, a description of the funding arrangement, including an indication that

    • (i) pension benefits or pension benefit credits may need to be reduced if negotiated contributions are insufficient to meet the funding requirements under the Act, and

    • (ii) the administrator may amend the plan to reduce, subject to the Superintendent’s authorization, pension benefits or pension benefit credits.

• (1.1) The written statement to be given in accordance with paragraph 28(1)(b.1) of the Act shall show

  • (a) the name of the former member;

  • (b) the period to which the statement applies;

  • (c) the name of the spouse or common-law partner of the former member listed on the records of the administrator;

  • (d) the name of any person on the records of the administrator designated as the beneficiary;

  • (e) in the case of a plan other than a defined contribution plan,

    • (i) the total employer payments made to the plan for the plan year, and

    • (ii) the total value of solvency assets and solvency liabilities of the plan on the valuation date;

  • (f) in respect of the defined benefit provisions of an uninsured defined benefit plan,

    • (i) if the ratio as calculated in accordance with paragraph (b) of the definition solvency ratio in subsection 2(1) is less than one,

      • (A) the value and description of the ratio, the valuation date and the date of the next valuation,

      • (B) except in the case of a negotiated contribution plan, a description of the measures the administrator has implemented or will implement to bring that ratio to one, and

      • (C) the extent to which the former member’s benefit would be reduced if the plan were terminated and wound up with that solvency ratio, or

    • (ii) in any other case, the value and description of the ratio, its valuation date and the date of the next valuation;

  • (g) for the assets of a plan that are not held in respect of member choice accounts,

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

    • (ii) the target asset allocation expressed as a percentage of the total assets;

  • (h) in the case of a negotiated contribution plan, a description of the funding arrangement, including an indication that

    • (i) pension benefits or pension benefit credits may need to be reduced if negotiated contributions are insufficient to meet the funding requirements under the Act, and

    • (ii) the administrator may amend the plan to reduce, subject to the Superintendent’s authorization, pension benefits or pension benefit credits;

  • (i) for a former member who is receiving a variable benefit,

    • (i) the date of birth used to determine the minimum variable benefit payable for the year,

    • (ii) the date the variable benefit began to be paid,

    • (iii) the minimum and maximum allowable variable benefit payable, as well as the amount that the former member is receiving,

    • (iv) the investment from which the variable benefit was paid,

    • (v) the payment frequency over the year,

    • (vi) an indication of how the former member may change their election regarding the amount to be paid during the year and the investment from which the variable benefit is to be paid, and

    • (vii) a list of the transfer options available under subsection 16.4(1) of the Act; and

  • (j) a statement setting out the right to access the documents described in paragraph 28(1)(c) of the Act.

• (2) A written statement referred to in paragraph 28(1)(d) of the Act, in the case of a member who has retired from a plan, shall be in the form set out in Form 1 of Schedule IV.

• (3) The written statement referred to in paragraph 28(1)(d) of the Act, in the case of a plan member who ceases to be a member of the plan for any reason other than the termination of the whole or part of the plan or retirement, shall be given in Form 2 of Schedule IV.

• (4) The written statement referred to in paragraph 28(1)(e) of the Act shall be given in Form 3 of Schedule IV.

• (5) [Repealed, SOR/2015-60, s. 14]

23.1 For the purposes of paragraph 28(1)(c) of the Act, each person referred to in that paragraph may examine

• (a) the written statement of investment policies and procedures that pertain to the plan’s portfolio of investments and loans as described in subsection 7.1(1);

• (b) the funding policy of a negotiated contribution plan described in section 10.992; and

• (c) the governance policy of a negotiated contribution plan described in section 10.993.

Information to Be Provided — Phased Retirement Benefits

23.2 The administrator of a plan that provides for the payment of a phased retirement benefit shall give, in written form, to the person to whom the benefit is to be paid, and to their spouse or common-law partner, before the person enters into an agreement referred to in paragraph 16.1(3)(a) of the Act

• (a) if the person is a member before the phased retirement period begins, the statements shown in Forms 1 and 5 of Schedule IV; and

• (b) if, before that period begins, the person is a former member who has retired, the statement shown in Form 5.1 of Schedule IV.

Information To Be Provided — Variable Benefits

23.3 The notification of consent of the spouse or common-law partner required under paragraph 16.2(2)(a) of the Act shall be made in Form 5.2 of Schedule IV.

Information on Plan Termination

• 23.4 (1) The written statement required under paragraph 28(2.1)(a) of the Act shall be given in Form 2.1 of Schedule IV.

• (2) The written statement required under paragraph 28(2.1)(b) of the Act shall be given in Form 2.2 of Schedule IV.

Report on Termination of Plan

24 A report filed pursuant to subsection 29(9) of the Act on the termination of a plan or part of a plan shall be prepared

• (a) by an actuary, accountant or other professional advisor, in the case of

  • (i) a defined contribution plan where the contributions under the plan are allocated to individual plan members, or

  • (ii) a defined benefit plan that is an insured plan; and

• (b) by an actuary, in the case of any other plan.

• 24.1 (1) For the purposes of this section, solvency deficit means the amount by which the solvency liabilities as at the date of termination of a plan or the valuation date, as the case may be, exceeds the sum of the solvency assets at that date and the amounts required to be paid under subsection 29(6) of the Act.

• (2) For the purposes of subsection 29(6.1) of the Act,

  • (a) an employer shall pay an amount equal to the solvency deficit as at the date of termination of the plan either in a lump sum or by equal annual payments sufficient to liquidate the solvency deficit over a period of five years from the date of termination;

  • (b) the interest rate used to determine the annual payments is the same as the interest rate used to determine the solvency liabilities of the plan at the date of termination; and

  • (c) the annual payments shall be paid by equal monthly instalments no later than 30 days after the end of each month.

• (3) The annual payment determined under paragraph (2)(a) that is to be paid in the plan year in which the plan is terminated may be reduced by the amounts required to be paid under subsection 29(6) of the Act.

• (4) An actuarial report, filed after termination of the plan but before it is wound up, shall set out the remaining solvency assets, solvency liabilities, solvency deficit and remaining payments required to liquidate the solvency deficit as at the valuation date. The solvency assets and solvency deficit shall not include the face value of any letters of credit.

• (5) If the present value of remaining payments determined in accordance with paragraph (2)(a) exceeds the remaining solvency deficit established as at the valuation date in accordance with the actuarial report referred to in subsection (4), the payments remaining to be made in respect of the solvency deficit are reduced pro rata.

• (6) If the remaining solvency deficit established as at the valuation date in accordance with the actuarial report referred to in subsection (4) exceeds the present value of remaining payments determined in accordance with paragraph (2)(a), the remaining payments are increased pro rata such that the remaining payments will liquidate the remaining solvency deficit over the remainder of the five-year period beginning on the date of termination.

• (7) Any solvency deficit that arises five or more years after the date of termination of the plan shall be immediately paid down.

• (8) For the purposes of subsection 29(6.3) of the Act, the portion of the remaining amount that is attributable to the payments made under subsection 29(6.1) of the Act is equal to the lesser of

  • (a) the amount remaining in the pension fund at the date of winding-up, and

  • (b) the accumulated value at the date of winding-up, with interest at the rates earned by the pension fund, of the payments made under subsection 29(6.1) of the Act.

Electronic Communications

• 25 (1) For the purposes of paragraph 31.1(1)(a) of the Act, the addressee may consent in writing, in paper or electronic form, or orally.

• (2) Before an addressee consents, the administrator shall notify the addressee

  • (a) of the addressee’s right to revoke their consent at any time;

  • (b) of the addressee’s responsibility to inform the administrator of any changes the addressee makes to the designated information system, including any changes made to the contact information for the designated information system; and

  • (c) of the date when the consent takes effect.

• (3) The addressee shall revoke their consent in writing, in paper or electronic form, or orally.

25.1 If an electronic document is provided on a generally accessible information system, such as a website, the administrator shall provide to the addressee written notice, in paper or electronic form, of the electronic document’s availability and location.

25.2 An electronic document is considered to have been provided to an addressee when it is entered into or made available on the information system designated by the addressee.

• 25.3 (1) If an administrator has reason to believe that an addressee has not received an electronic document or the notice required under section 25.1, the administrator shall mail a paper copy of the document to the addressee.

• (2) The mailing of a paper copy does not affect when the electronic document is considered to have been provided under section 25.2.

General

• 26 (1) A pension benefit that is being paid under a plan shall not be reduced as a consequence of an increase in the benefits being paid under the Old Age Security Act, the Canada Pension Plan or a provincial pension plan as defined in section 3 of the Canada Pension Plan.

• (2) A pension benefit to which a plan member or former member is entitled under a plan shall not cease or be reduced as a consequence of the eligibility of that plan member or former member on account of age for a benefit payable before the age of 65 under the Old Age Security Act, the Canada Pension Plan or a provincial pension plan as defined in section 3 of the Canada Pension Plan, unless the plan member or former member has made an election to vary the pension benefit under subsection 16(6) of the Act.

27 For the purposes of the Act,

• (a) a pension benefit granted after December 31, 1986 in respect of membership in a plan prior to January 1, 1987 shall be attributed to membership in the plan after December 31, 1986; and

• (b) where a pension benefit is based on a rate of remuneration of a plan member as of the date the plan member retires, or is based on an average of the rates of remuneration of a plan member over a specified and limited period, up to and including the date the plan member retires, the portion of the pension benefit attributable to membership in a plan after December 31, 1986 is

  • (i) the pension benefit,

  less

  • (ii) the pension benefit calculated as of December 31, 1986 using the rate of remuneration of the plan member as of the date the member ceases membership in the plan or retires, or the average of the rates of remuneration of the plan member over a specified and limited period, as of the date the member ceases membership in the plan or retires, as the case may be.

28 Where a plan provides for pension benefits for an employee who is not employed in included employment and the employee is employed in a designated province referred to in section 3, the plan is exempt from the application of the Act in respect of any benefits for the employee.

28.1 A pension plan that was established by a provincial statute in respect of a work, undertaking or business that is within the exclusive legislative authority of that province and in which an employee who is employed in included employment participates is exempt from the application of the Act.

28.2 A pension plan that was established in respect of a telephone company that was not registered under the Act or under the Pension Benefits Standards Act, chapter P-7 of the Revised Statutes of Canada, 1985 before August 14, 1989 is exempt from the application of the Act in respect of any benefits that are derived from membership in the pension plan before that date.

28.3 Section 18 of the Act does not apply in respect of an amount of a pension benefit credit that exceeds the maximum transfer that may be made from a pension plan to another pension plan or to a registered retirement savings plan under the Income Tax Act.

• 28.4 (1) Where a plan provides pension benefits for a plan member or former member who has ceased to be a resident of Canada for at least two calendar years and has ceased employment with the employer who is a party to the plan or ceased membership in a multi-employer pension plan, the pension benefits or pension benefit credits applicable to that member or former member are exempt from the application of section 18 of the Act.

• (2) For the purposes of this section, a plan member or former member shall be deemed to have been a resident of Canada throughout a calendar year if that member or former member has sojourned in Canada in the year for a period of, or periods the total of which is, 183 days or more.

28.5 A supplemental pension plan is exempt from the application of the Act if, under the terms of the pension plan to which it is supplemental, all the members of the supplemental pension plan are entitled to benefits at least equal to the maximum benefit or contribution limit under the Income Tax Act.

28.6 Bridging benefits are exempt from the application of sections 22 and 23 of the Act.

29 An employee who is receiving a pension benefit from a plan is exempt from the application of sections 14 and 15 of the Act in respect of that plan.

30 The Superintendent may request an administrator to provide to the Superintendent an up-to-date consolidation of a plan and any amendments thereto.

Forms

30.1 A written consent referred to in paragraph 16.1(3)(b) of the Act shall be in the form set out in Form 6 of Schedule IV.

31 A written agreement referred to in subsection 22(5) of the Act shall be in the form set out in Form 4 of Schedule II.

32 A notice of objection referred to in subsection 32(1) of the Act shall be in the form set out in Form 5 of Schedule II and shall be served by registered mail or delivery to the Superintendent of Financial Institutions.

33 A notice of appeal referred to in subsection 33(2) of the Act shall be in the form set out in Form 6 of Schedule II.

SCHEDULE II

FORM 1

[Repealed, SOR/95-171, s. 6]

FORM 2(Section 13)Required Information

• 1 Name, address and telephone number of the administrator.

• 2 Name and address of the pension fund custodian or trustee together with any applicable policy or account number.

• 3 Name and address of the external auditor.

• 4 Total membership in the plan at plan year end.

• 5 List of all members of a board of trustees or pension committee of the plan.

FORM 2.1(Section 15)Investment Information Return

• 1 Are all of the benefits provided by an insured plan or by a pension plan in respect of which an annuity contract has been issued by the Government of Canada?

  Yes No

• 2 Are all of the pension plan’s assets held in an unallocated general fund of a person authorized to carry on a life insurance business in Canada?

  Yes No

(If the answer to Question 1 and 2 is “No”, complete the following.)

• 3 As at the end of the last plan year, had the administrator established a written statement of investment policies and procedures in accordance with subsection 7.1(1) to the Pension Benefits Standards Regulations, 1985?

  Yes No

• 4 If a statement of investment policies and procedures had been established as at the end of the plan year preceding the last plan year, did the administrator review it during the last plan year?

  Yes No

• 5 If a statement of investment policies and procedures had been established as at the end of the plan year preceding the last plan year, was the statement amended during the last plan year?

  Yes No

• 6 If a statement of investment policies and procedures was established or amended during the last plan year, were the pension council, if one exists, and the actuary to the plan, if the pension plan is a defined benefit plan, given a copy of the statement or amendments in accordance with subsection 7.1(3) or 7.2(2) of the Pension Benefits Standards Regulations, 1985?

  Yes No

• 7 During the last plan year, were the moneys of the pension fund invested in accordance with section 6 of the Pension Benefits Standards Regulations, 1985?

  Yes No

Certification

I hereby certify that, to the best of my knowledge and belief, the information entered on this Investment Information Return, and any other information that has been requested by the Superintendent of Financial Institutions and is attached to this Return, is true and correct.

Administrator’s Signature

Name(s) (Use block letters)

• (If the administrator is a board of trustees or other similar body, all trustees or members of the body must sign)

Date:

FORM 3(Subsection 18(3))Application To Transfer Pension Benefit Credits Under Sections 16.4 and 26 of the Pension Benefits Standards Act, 1985

• 1 Applicant

  I, , am a (member, former member, survivor) of the registered pension plan known as

  and I apply to

• 2 Transfer or Purchase (check one)

  • (a)  

    transfer my pension benefit credit to a locked-in registered retirement savings plan of the kind described in section 20 of the Pension Benefits Standards Regulations, 1985;
  • (b)  

    transfer my pension benefit credit to a life income fund of the kind described in section 20.1 of the Pension Benefits Standards Regulations, 1985;
  • (c)  

    transfer my pension benefit credit to a restricted life income fund of the kind described in section 20.3 of the Pension Benefits Standards Regulations, 1985;
  • (d)  

    use my pension benefit credit to purchase an immediate life annuity of the kind described in section 21 of the Pension Benefits Standards Regulations, 1985;
  • (e)  

    use my pension benefit credit to purchase a deferred life annuity of the kind described in section 21 of the Pension Benefits Standards Regulations, 1985;
  • (f)  

    transfer my pension benefit credit to a pension plan of which I am currently a member, which is known as ; or
  • (g)  

    transfer my pension benefit credit to a PRPP.

• 3 Signatures

  Signature of member (or former member or survivor)

  Name of member (or former member or survivor)

  Signature of witness

  Name of witness

  Address of witness

  Signed at on , 20.

• 4 Confirmation of the request received by the financial institution for (check one)

  • (a)  

    a transfer of the funds to a locked-in registered retirement savings plan of the kind described in section 20 of the Pension Benefits Standards Regulations, 1985;
  • (b)  

    a transfer of the funds to a life income fund of the kind described in section 20.1 of the Pension Benefits Standards Regulations, 1985;
  • (c)  

    a transfer of the funds to a restricted life income fund of the kind described in section 20.3 of the Pension Benefits Standards Regulations, 1985;
  • (d)  

    the use of the funds to purchase a deferred life annuity of the kind described in section 21 of the Pension Benefits Standards Regulations, 1985; or
  • (e)  

    the use of the funds to purchase an immediate life annuity of the kind described in section 21 of the Pension Benefits Standards Regulations, 1985, the funds of which shall be only used to purchase another immediate life annuity that meets the requirements of those Regulations.

• 5 Signatures

  Signature of applicant

  Name of applicant

  Signature of officer of financial institution

  Name of financial institution

  Signed at on , 20.

FORM 3.1(Subsection 18(3.1))Spouse’s or Common-Law Partner’s Consent for the Transfer of a Pension Benefit Credit

I, , hereby certify that I am the spouse or common-law partner as defined by the Pension Benefits Standards Act, 1985, of .

I understand that my spouse or common-law partner has elected to transfer their pension benefit credit and that my written consent is required to enable my spouse or common-law partner to do so.

I understand that

• (a) transferring the pension benefit credit will allow my spouse or common-law partner to manage their own pension fund and will allow flexibility in determining the amount that will be paid to my spouse or common-law partner in each calendar year;

• (b) the transferred funds may be used to purchase a life annuity at a later date, but there is no requirement that the funds be used to purchase a life annuity;

• (c) if the transferred funds are used to purchase a life annuity, the life annuity must be in the joint and survivor form unless I waive my entitlements by signing a separate waiver form within 90 days before the day on which the annuity payments begin.

I further understand that transferring the pension benefit credit to a retirement savings plan of the prescribed kind will allow my spouse or common-law partner to withdraw some of the funds each year, subject to any minimum and maximum withdrawal limits. I understand, however, that the amount of pension income or survivor benefit available to me in later years may be significantly reduced if

• (a) my spouse or common-law partner elects to withdraw the maximum amount permitted each year; or

• (b) the investment performance is poor.

Nevertheless, I consent to the transfer of the pension benefit credit to a retirement savings plan of the prescribed kind and certify that

• (a) I have read this form and understand it;

• (b) neither my spouse or common-law partner nor anyone else has put any pressure on me to sign this form;

• (c) I realize that

  • (i) this form only gives a general description of the legal rights I have under the Pension Benefits Standards Act, 1985 and the Pension Benefits Standards Regulations, 1985, and

  • (ii) if I wish to understand exactly what my legal rights are I must read the Pension Benefits Standards Act, 1985 and the Pension Benefits Standards Regulations,1985 or seek legal advice; and

• (d) I realize that I am entitled to keep a copy of this consent form.

To consent to the transfer, I sign this consent form at on , 20.

Name and registration number of pension plan of my spouse or common-law partner

Signature of spouse or common-law partner

Address of spouse or common-law partner

(home telephone number)

(work telephone number)

STATEMENT OF WITNESS

I certify that

• (a) My full name is

• (b) My address is

• (c) I witnessed sign this waiver.

Signature of witness

(home telephone number)

(work telephone number)

FORM 4(Section 31)Agreement of Spouse or Common-Law Partner to Pension Benefit Reduction on Death of Member or Former Member

I, , hereby certify that I, am (a) the spouse or (b) the common-law partner, as defined in section 2 of the Pension Benefits Standards Act, 1985 of , a (member) (former member) of the pension plan known as .

Under the terms of that pension plan,

• (a) the amount of pension benefit payable to my spouse or common-law partner as a (member) (former member) is $ per (period), and

• (b) the amount of the pension benefit payable to me on the death of my spouse or common-law partner is $ per (period), this amount being not less than 60 per cent of the pension benefit payable to my spouse or common-law partner in accordance with subsection 22(2) of the Pension Benefits Standards Act, 1985.

Based on the above, and in accordance with subsection 22(5) of the Pension Benefits Standards Act, 1985, I hereby agree to waive:

		Check one
1	my entitlement to any pension benefit payable to me on the death of my spouse or common-law partner, or
2	a portion of the pension benefit payable to me on the death of my spouse or common-law partner so that my pension benefit is $ per (period), this amount being less than the minimum 60 per cent of the pension benefit payable to my spouse or common-law partner to which I would otherwise be entitled

Signed at on the day of , 19
Signature of Witness (other than the member or former member)	Signature of Spouse or common-law partner
Name of Witness	Address of Spouse or common-law partner
Address of Witness

FORM 5(Section 32)Notice of Objection

To:	The Superintendent of Financial Institutions, Ottawa.
Name of Administrator
Mailing Address in Canada
Pursuant to section 32 of the Pension Benefits Standards Act, 1985, notice of objection is hereby given to the action of the Superintendent of Financial Institutions in (refusing registration) (revoking registration and cancelling the certificate of registration) of the pension plan known as
as evidenced by the Superintendent’s notification dated the day of , 19.
The reasons for objection and the facts relevant thereto are as follows:
		Signature
Date		Title or Position
NOTE:
1	This form is for the use of an administrator who, pursuant to section 32(1) of the Act, wishes to make a formal objection to the action of the Superintendent of Financial Institutions in refusing registration or revoking the registration and cancelling the certificate of registration of a pension plan.
2	TWO copies of the objection are to be sent by REGISTERED MAIL to the Superintendent of Financial Institutions, Office of the Superintendent of Financial Institutions, Ottawa, K1A 0H2, Canada. For the notice of objection to have effect, the envelope containing the objection must be postmarked within 60 days after the date that the Superintendent of Financial Institutions mailed the notification that registration had been refused or that registration had been revoked and the certificate of registration cancelled, as the case may be.
3	The NOTICE OF OBJECTION must be signed by the administrator.

FORM 6(Section 33)Notice of Appeal in the Federal Court of Canada

In Re the Pension Benefits Standards Act, 1985

BETWEEN

Appellant

-and-

Respondent

NOTICE OF APPEAL

NOTICE OF APPEAL is hereby given from the decision of the Superintendent of Financial Institutions to (refuse) (revoke) registration of the pension plan known as

as evidenced by the notifications of the Superintendent dated the day of , 19, and the day of , 19.

A Statement of Facts

(Insert a brief statement of the facts, including the date and a brief résumé of the particulars of the application for registration or the circumstances surrounding the revocation of the registration of the pension plan.)

B The statutory provisions upon which the Appellant relies and the Reasons that the Appellant intends to submit:

C Name and Address of Appellant’s Solicitor (if any):

Dated at this day of , 19 .

(Appellant)

• SOR/90-363, ss. 6, 7
• SOR/93-109, ss. 8(F), 10(E)
• SOR/93-299, s. 5
• SOR/95-171, s. 6
• SOR/95-551, s. 6
• SOR/2001-194, ss. 2, 4, 5
• SOR/2002-78, ss. 18, 19
• SOR/2008-144, s. 7
• SOR/2015-60, ss. 18, 19