Solvency Funding Relief Regulations, 2009 (SOR/2009-182)

Interpretation

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

  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; or

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

  Act

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

  bank

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

  beneficiary

  beneficiary means a member or former member of a plan or any person who is entitled to pension benefits under the plan except

  • (a) a former member who has transferred or has chosen to transfer their pension benefit credit under section 26 of the Act; and

  • (b) a former member for whom the administrator has purchased an immediate or deferred life annuity. (bénéficiaire)

  beneficiary representative

  beneficiary representative means a union representative or court-appointed representative of a beneficiary. (représentant des bénéficiaires)

  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)

  Crown Corporation

  Crown Corporation means a Crown corporation that is an agent of Her Majesty in right of Canada in respect of which employment has not been excepted from included employment by a regulation made under subsection 4(6) of the Act. (société d’État)

  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 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 plan;

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

  • (d) the filing of any application or petition by the employer, or against the employer, under the Companies’ Creditors Arrangement Act, the Bankruptcy and Insolvency Act or the Winding-up and Restructuring Act;

  • (e) the termination of the whole plan;

  • (f) the non-renewal of a letter of credit referred to in Part 3 for its full face amount unless

    • (i) it has been replaced by another letter of credit for the same face amount at least 30 days before the beginning of the following plan year,

    • (ii) an amount equal to the face amount of the letter of credit has been remitted to the pension fund at least 30 days before the beginning of the following plan year, or

    • (iii) the face amount of the letter of credit has been reduced in accordance with section 28; or

  • (g) 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 amount of the letters of credit required by subsection 21(3). (défaut)

  deficiency

  deficiency means a 2008 solvency deficiency or a solvency deficiency referred to in subsection 5(1) or 21(1) or (2). (déficit)

  holder

  holder means a trust company that is licensed to carry on business in Canada and that has entered into a trust agreement with the employer or, if the employer is not the administrator, with the employer and the administrator. (détenteur)

  issuer

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

  solvency shortfall

  solvency shortfall means the amount, calculated as at the 2008 plan year end, by which the liabilities of the plan, determined on the basis that the plan is terminated or on a basis that is certified by an actuary to be reasonably approximate to a termination basis, and that takes into account any significant increases or decreases in benefits to the plan members as a result of the termination, exceed the total of

  • (a) the aggregate of the value of the assets of the plan, determined on the basis of market value or of a value related to the market value by means of a method using market values over a period of not more than five years to stabilize short-term fluctuations, and

  • (b) the present value of a special payment in respect of a solvency deficiency that emerged before the 2008 plan year end and that was calculated, as the case may be, in accordance with section 9 of the Pension Benefits Standards Regulations, 1985, section 9 or 13 of the Air Canada Pension Plan Solvency Deficiency Funding Regulations or section 5, 6, 7 or 19 of the Solvency Funding Relief Regulations. (déficit à combler)

  special payment

  special payment means a payment or one of a series of payments that is determined in accordance with section 9 of the Pension Benefits Standards Regulations, 1985, section 9 or 13 of the Air Canada Pension Plan Solvency Deficiency Funding Regulations, section 5, 6, 7 or 19 of the Solvency Funding Relief Regulations or section 5 or 21 of these Regulations. (paiement spécial)

  2008 solvency deficiency

  2008 solvency deficiency means the solvency deficiency of a plan that emerged on the date on which the valuation that identified the deficiency was performed, as reported in the first actuarial report filed with the Superintendent after the coming into force of these Regulations, and that values the plan as at a date that is in the period beginning on November 1, 2008 and ending on October 31, 2009. (déficit de solvabilité pour l’année 2008)

  2008 plan year

  2008 plan year means the plan year that ends no later than October 31, 2009. (exercice 2008)

  2009 plan year

  2009 plan year means the plan year that ends no later than October 31, 2010. (exercice 2009)

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

Application

• 2 (1) These Regulations apply to the funding of a defined benefit plan and, except as otherwise provided, the Pension Benefits Standards Regulations, 1985 also apply to the funding of a plan under these Regulations.

• (2) For the purposes of these Regulations, a 2008 solvency deficiency shall be calculated in accordance with the definition solvency deficiency in subsection 9(1) of the Pension Benefits Standards Regulations, 1985 and that definition shall be interpreted, in its paragraph (d), as including the present value of any special payments that are due in the next 10 years and that have been determined before the emergence of the 2008 solvency deficiency.

• (3) In the case of an inconsistency between these Regulations and the Pension Benefits Standards Regulations, 1985, these Regulations prevail.

3 These Regulations do not apply to a solvency deficiency that emerges as the result of Air Canada electing to fund a plan in accordance with Part 2 of the Air Canada Pension Plan Solvency Deficiency Funding Regulations other than in respect of a 2008 solvency deficiency that emerges as at the end of the 2008 plan year, despite section 21 of those Regulations.

• 4 (1) Plans may only be funded under these Regulations if all of the payments that are owed to the pension fund before the day on which the deficiency emerges, as required by subsection 9(14) of the Pension Benefits Standards Regulations, 1985, have been made as at the filing date of the actuarial report that shows the emergence of that deficiency.

• (2) Despite section 8 of the Pension Benefits Standards Regulations, 1985, the funding of a plan shall be considered to meet the standards for solvency if the funding is in accordance with Part 1, 2 or 3 of these Regulations.

PART 1Funding

General Funding Rules

• 5 (1) Despite subsection 9(4) of the Pension Benefits Standards Regulations, 1985 and section 13 of the Air Canada Pension Plan Solvency Deficiency Funding Regulations, a solvency deficiency, as defined in subsection 9(1) of the Pension Benefits Standards Regulations, 1985, of a plan that emerged at the end of the 2008 plan year may be funded in accordance with section 9 of those Regulations but the remittance to the pension fund of a portion of the special payments determined in accordance with those Regulations may be made in accordance with subsection (2) or (3), as the case may be.

• (2) If the actuarial report that values the plan as at the end of the 2008 plan year indicates that there is a 2008 solvency deficiency and that there is a solvency deficiency as defined in subsection 9(1) of the Pension Benefits Standards Regulations, 1985, a portion of the special payments determined in accordance with subsection 9(4) of those Regulations or section 13 of the Air Canada Pension Plan Solvency Deficiency Funding Regulations may be paid to the pension fund as if the 2008 solvency deficiency were funded by special payments sufficient to liquidate the 2008 solvency deficiency by equal annual payments over a period not exceeding 10 years from the day on which the 2008 solvency deficiency emerged.

• (3) If the actuarial report that values the plan as at the end of the 2008 plan year indicates that there is no 2008 solvency deficiency but that there is a solvency deficiency as defined in subsection 9(1) of the Pension Benefits Standards Regulations, 1985, the special payments determined in accordance with subsection 9(4) of those Regulations or section 13 of the Air Canada Pension Plan Solvency Deficiency Funding Regulations may be paid to the pension fund provided that those special payments result in the solvency shortfall being funded and liquidated over a period not exceeding 10 years from the day on which the solvency shortfall was calculated.

• (4) For the purposes of subsection 8(1) of the Act, if the 2008 solvency deficiency or solvency shortfall, as the case may be, is calculated by valuing the assets of a plan in excess of 110% of market value as at the date on which the valuation that identified the 2008 solvency deficiency or solvency shortfall was performed, the amount by which the aggregate amount of special payments calculated using a value of assets equal to 110% of market value on that date exceeds the aggregate amount of special payments calculated using a value of assets in excess of 110% of market value on that date shall be considered to be an amount accrued to the pension fund.

• (5) The amount that was accrued as a result of subsection (4) is considered to have been paid to the plan at the end of the fifth plan year after the end of the 2009 plan year by special payments that have been calculated in accordance with these Regulations and section 9 of the Pension Benefits Standards Regulations, 1985 provided that all those payments have been made to the fund by the end of that plan year.

• (6) If the funding is for a deficiency of a multi-employer pension plan and if the annual amount of the payments required to be made to the pension fund in accordance with subsection (2) or (3), as the case may be, is less than the aggregate amount of the payments that are required to be made to the pension fund, excluding the normal cost and the special payments required to liquidate an unfunded liability, under all applicable collective agreements, the amount of the payments required to be made to the pension fund in accordance with subsection (2) or (3), as the case may be, shall be the aggregate amount of the payments required to be made to the pension fund under all applicable collective agreements and subsection (4) shall not apply.