# Additional Canada Pension Plan Sustainability Regulations (SOR/2021-6)

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Regulations are current to 2023-05-17

## Changes to Contribution Rates and Benefits (continued)

### Actions When Rates in Surplus Position (continued)

Marginal note:Target benefit multipliers

**8** For the purposes of sections 9 and 10, the interim target benefit multiplier is the value determined by the following formula for the last year of whichever of the applicable periods determined under section 5, paragraph 6(b) or subsection 7(1) or (3) is the shortest and the final target benefit multiplier is the value determined by that formula for the last year of whichever of those periods is the longest:

BM_{t–1} × [(1 + S1 + S2) – (S1 + S2) × (PI_{t–1} / PI_{t})]

where

- BM
_{t–1} - is the value of the benefit multiplier for the year before that year;
- S1
- is the value for S1 determined under subsection 7(1), if applicable to that year;
- S2
- is the value for S2 determined under section 5, paragraph 6(b) or subsection 7(3), if applicable to that year;
- PI
_{t–1} - is the Pension Index for the year before that year, based on the assumption of future inflation set out in the most recent report prepared for the purpose of section 115 of the Act; and
- PI
_{t} - is the Pension Index for that year, based on the assumption of future inflation set out in the most recent report prepared for the purpose of section 115 of the Act.

Marginal note:Determination of new benefits

**9**(1) Benefits that become payable in a year are to be determined by multiplying the corresponding legislated benefits by the benefit multiplier for that year.Marginal note:Benefit multiplier — no interim adjustment

(2) If the interim and final target benefit multipliers are equal, the benefit multiplier is equal to

(a) the value determined by the following formula, for each year for which that value is less than the interim and final target benefit multipliers:

BM

_{t–1}× [(1 + S1 + S2) – (S1 + S2) × (PI_{t–1}/ PI_{t})]where

- BM
_{t–1} - is the value of the benefit multiplier for the year before that year,
- S1
- is the value for S1, if any, determined under subsection 7(1),
- S2
- is the value for S2, if any, determined under section 5, paragraph 6(b) or subsection 7(3),
- PI
_{t–1} - is the Pension Index for the year before that year, and
- PI
_{t} - is the Pension Index for that year; or

- BM
(b) for each subsequent year, the interim and final target benefit multipliers.

Marginal note:Benefit multiplier — interim adjustment

(3) If the interim target benefit multiplier is less than the final target benefit multiplier, the benefit multiplier is equal to

(a) the value determined by the following formula, for each year for which that value is less than or equal to the interim target benefit multiplier:

BM

_{t–1}× [(1 + S1 + S2) – (S1 + S2) × (PI_{t–1}/ PI_{t})]where

- BM
_{t–1} - is the value of the benefit multiplier for the year before that year,
- S1
- is the value for S1 determined under subsection 7(1),
- S2
- is the value for S2 determined under subsection 7(3),
- PI
_{t–1} - is the Pension Index for the year before that year, and
- PI
_{t} - is the Pension Index for that year;

- BM
(b) the value determined by the following formula, for each year to which paragraph (a) does not apply and for which that value is less than the final target benefit multiplier:

BM

_{t–1}× [(1 + S) – S × (PI_{t–1}/ PI_{t})]where

- BM
_{t–1} - is the value of the benefit multiplier for the year before that year,
- S
- is the value for S1 determined under subsection 7(1) or, if the period determined under subsection 7(3) is longer than the period determined under subsection 7(1), the value for S2 determined under subsection 7(3),
- PI
_{t–1} - is the Pension Index for the year before that year, and
- PI
_{t} - is the Pension Index for that year; or

- BM
(c) for each subsequent year, the final target benefit multiplier.

Marginal note:Determination of other benefits

**10** Benefits, other than those that become payable in a year, are to be determined, for each year to which paragraph 9(2)(a) or (3)(a) or (b) applies and for the first year to which paragraph 9(2)(b) or (3)(c) applies, by multiplying the previous year’s benefits not by the ratio referred to in paragraph 45(2)(b) and subparagraphs 56(2)(c)(ii), 58(1.1)(b)(ii) and 59(c)(ii) of the Act, but by the value determined by the following formula, as the case may be:

(a) for each year to which paragraph 9(2)(a) or (3)(a) applies,

(1 + S1 + S2) × (PI

_{t}/ PI_{t–1}) – (S1+ S2)where

- S1, S2, PI
_{t}and PI_{t–1} - have the same values as in the applicable paragraph;

- S1, S2, PI
(b) for each year to which paragraph 9(3)(b) applies,

(1 + S) × (PI

_{t}/ PI_{t–1}) – Swhere

- S, PI
_{t}and PI_{t–1} - have the same values as in that paragraph; or

- S, PI
(c) for the first year to which paragraph 9(2)(b) or (3)(c) applies,

(FTBM / BM

_{t–1}) × (PI_{t}/ PI_{t–1})where

- FTBM
- is the final target benefit multiplier,
- BM
_{t–1} - is the benefit multiplier for the year before that year,
- PI
_{t} - is the Pension Index for that year, and
- PI
_{t–1} - is the Pension Index for the year before that year.

### Actions When Rates in Deficit Position

Marginal note:No previous increase in benefits

**11**(1) If benefits are less than or equal to the corresponding legislated benefits, a value for S4 is to be determined, for the purposes of sections 13 to 15, such that if the Chief Actuary were to calculate the first additional contribution rates under paragraph 115(1.1)(d) of the Act assuming the following, the rates calculated would be as close as possible to the corresponding first additional contribution rates for self-employed persons, excluding any past temporary increases in those rates resulting from the operation of these Regulations:(a) benefits accompanied by temporary increases in the first additional contribution rates and second additional contribution rates calculated under subparagraphs 115(1.1)(d)(ii) and (e)(ii) of the Act, respectively, are to be excluded;

(b) S4 is to apply to a period of six years, starting with the year after the review period;

(c) benefits that become payable after the review period are to be decreased for the year in which they become payable in accordance with section 14, using the assumptions set out in the most recent report prepared for the purpose of section 115 of the Act; and

(d) for each year of the period to which S4 applies, benefits that became payable before that year are to be adjusted by multiplying them not by the ratio referred to in paragraph 45(2)(b) and subparagraphs 56(2)(c)(ii), 58(1.1)(b)(ii) and 59(c)(ii) of the Act, but by the value determined by the formula

(1 + S4) × (PI

_{t}/ PI_{t–1}) – S4where

- S4
- is a multiple of 0.01 between -0.4 and 0,
- PI
_{t} - is the Pension Index for that year, based on the assumption of future inflation set out in the most recent report prepared for the purpose of section 115 of the Act, and
- PI
_{t–1} - is the Pension Index for the year before that year, based on the assumption of future inflation set out in the most recent report prepared for the purpose of section 115 of the Act.

Marginal note:Deemed change to contribution rates

(2) If the rates calculated under subsection (1) exceed the corresponding first additional contribution rates for self-employed persons, excluding any past temporary increases in those rates resulting from the operation of these Regulations, by more than 0.0001,

(a) the first additional contribution rates for self-employed persons are deemed to equal the corresponding rates calculated under subsection (1);

(b) the first additional contribution rates for employees and employers are deemed to equal the corresponding rates referred to in paragraph (a), divided by two; and

(c) the second additional contribution rates are deemed to equal the new corresponding first additional contribution rates multiplied by the additional contribution rate ratio.

Marginal note:Deemed temporary change to contribution rates

(3) For each year for which the first additional contribution rate calculated under subparagraph 115(1.1)(d)(ii) of the Act would include a temporary increase if benefits were determined in accordance with sections 14 and 15 and subsection 5(4) of the Calculation of Contribution Rates Regulations, 2021 did not apply,

(a) the first additional contribution rate for self-employed persons is deemed to equal the sum of the first additional contribution rate for self-employed persons for that year, as adjusted in accordance with subsection (2), if applicable, and the amount of any temporary increase, rounded to the nearest multiple of 0.01, that would apply to that year;

(b) the first additional contribution rate for employees and employers is deemed to equal the rate calculated under paragraph (a), divided by two; and

(c) the second additional contribution rates are deemed to equal the new corresponding first additional contribution rates multiplied by the additional contribution rate ratio.

Marginal note:Previous increase in benefits

**12**(1) If benefits are greater than the legislated benefits, a value for S3 and the period to which S3 is to apply are to be determined, for the purposes of sections 13 to 15, such that if the Chief Actuary were to calculate the first additional contribution rates under paragraph 115(1.1)(d) of the Act assuming the following, the rates calculated would be as close as possible to the corresponding first additional contribution rates for self-employed persons, excluding any past temporary increases in those rates resulting from the operation of these Regulations:(a) benefits accompanied by temporary increases in the first additional contribution rates and second additional contribution rates calculated under subparagraphs 115(1.1)(d)(ii) and (e)(ii) of the Act, respectively, are to be excluded;

(b) S3 is to apply to the shortest period that is a multiple of three years and no fewer than six years, starting with the year after the review period;

(c) benefits that become payable after the review period are to be decreased for the year in which they become payable in accordance with section 14, using the assumptions set out in the most recent report prepared for the purpose of section 115 of the Act; and

(d) for each year of the period to which S3 applies, benefits that became payable before that year are to be adjusted by multiplying them not by the ratio referred to in paragraph 45(2)(b) and subparagraphs 56(2)(c)(ii), 58(1.1)(b)(ii) and 59(c)(ii) of the Act, but by the value determined by the formula

(1 + S3) × (PI

_{t}/ PI_{t–1}) – S3where

- S3
- is a multiple of 0.01 between -1 and 0 that would result in the benefit multiplier for the last year of the period to which S3 applies being greater than or equal to 1 and less than the benefit multiplier for the last year of the review period,
- PI
_{t} - is the Pension Index for that year, based on the assumption of future inflation set out in the most recent report prepared for the purpose of section 115 of the Act, and
- PI
_{t–1} - is the Pension Index for the year before that year, based on the assumption of future inflation set out in the most recent report prepared for the purpose of section 115 of the Act.

Marginal note:Decrease in benefits

(2) If the rates calculated under subsection (1) exceed the corresponding first additional contribution rates for self-employed persons by more than 0.0001, a value for S4 is to be determined, for the purposes of sections 13 to 15, such that if the Chief Actuary were to calculate the first additional contribution rates under paragraph 115(1.1)(d) of the Act assuming the following, the rates calculated would be as close as possible to the corresponding first additional contribution rates for self-employed persons, excluding any past temporary increases in those rates resulting from the operation of these Regulations:

(a) benefits accompanied by temporary increases in the first additional contribution rates and second additional contribution rates calculated under subparagraphs 115(1.1)(d)(ii) and (e)(ii) of the Act, respectively, are to be excluded;

(b) S4 is to apply to a period of six years, starting with the year after the review period;

(c) benefits that become payable after the review period are to be decreased for the year in which they become payable in accordance with section 14, using the assumptions set out in the most recent report prepared for the purpose of section 115 of the Act; and

(d) for each year of the period to which S3 applies, benefits that became payable before that year are to be adjusted by multiplying them not by the ratio referred to in paragraph 45(2)(b) and subparagraphs 56(2)(c)(ii), 58(1.1)(b)(ii) and 59(c)(ii) of the Act, but by the value determined by the formula

(1 + S3 + S4) × (PI

_{t}/ PI_{t–1}) – (S3 + S4)where

- S3
- is the value for S3 determined under subsection (1),
- S4
- is a multiple of 0.01 between -0.4 and 0, if applicable to that year,
- PI
_{t} - is the Pension Index for that year, based on the assumption of future inflation set out in the most recent report prepared for the purpose of section 115 of the Act, and
- PI
_{t–1} - is the Pension Index for the year before that year, based on the assumption of future inflation set out in the most recent report prepared for the purpose of section 115 of the Act.

Marginal note:Repetition

(3) If the sum of the values for S3 and S4 that are determined, respectively, under subsections (1) and (2) is less than -1, the application of those subsections is to be repeated, with the shortest period referred to in paragraph (1)(b) being lengthened by three years for each repetition, until the sum of those values is greater than or equal to -1. All references in these Regulations to the value for S3 determined under subsection (1), the value for S4 determined under subsection (2), the period determined under subsection (1) or the rate calculated under subsection (1) or (2) are to be read as that value, period or rate following the final application of those subsections.

Marginal note:Deemed change to contribution rates

(4) If the rates calculated under subsection (2) exceed the corresponding first additional contribution rates for self-employed persons, excluding any past temporary increases in those rates resulting from the operation of these Regulations, by more than 0.0001,

(a) the first additional contribution rates for self-employed persons are deemed to equal the corresponding rates calculated under subsection (2);

(b) the first additional contribution rates for employees and employers are deemed to equal the corresponding rates referred to in paragraph (a), divided by two; and

(c) the second additional contribution rates are deemed to equal the new corresponding first additional contribution rates multiplied by the additional contribution rate ratio.

Marginal note:Deemed temporary change to contribution rates

(5) For each year for which the first additional contribution rate calculated under subparagraph 115(1.1)(d)(ii) of the Act would include a temporary increase if benefits were determined in accordance with sections 14 and 15 and subsection 5(4) of the Calculation of Contribution Rates Regulations, 2021 did not apply,

(a) the first additional contribution rate for self-employed persons is deemed to equal the sum of the first additional contribution rate for self-employed persons for that year, as adjusted in accordance with subsection (4), if applicable, and the amount of any temporary increase, rounded to the nearest multiple of 0.01, that is applicable to that year;

(b) the first additional contribution rate for employees and employers is deemed to equal the rate calculated under paragraph (a), divided by two; and

Marginal note:Target benefit multipliers

**13** For the purposes of sections 14 and 15, the interim target benefit multiplier is the value determined by the following formula for the last year of whichever of the applicable periods referred to in paragraph 11(1)(a) or 12(2)(a) or determined under subsection 12(1) is the shortest and the final target benefit multiplier is the value determined by that formula for the last year of the applicable period referred to in paragraph 11(1)(a) or determined under subsection 12(1):

BM_{t–1} × [(1 + S3 + S4) – (S3 + S4) × (PI_{t–1} / PI_{t})]

where

- BM
_{t–1} - is the value of the benefit multiplier for the year before that year;
- S3
- is the value for S3 determined under subsection 12(1), if applicable to that year;
- S4
- is the value for S4 determined under subsection 11(1) or 12(2), if applicable to that year;
- PI
_{t–1} - is the Pension Index for the year before that year, based on the assumption of future inflation set out in the most recent report prepared for the purpose of section 115 of the Act; and
- PI
_{t} - is the Pension Index for that year, based on the assumption of future inflation set out in the most recent report prepared for the purpose of section 115 of the Act.

- Date modified: