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

Regulations are current to 2020-09-09 and last amended on 2015-04-01. Previous Versions

PART 3 10-year Funding with Letters of Credit (continued)

New Solvency Deficiency

  •  (1) Despite section 9 of the Pension Benefits Standards Regulations, 1985, a solvency deficiency that emerges after the day on which the initial solvency deficiency emerged shall be calculated as the amount by which the solvency liabilities exceed the sum of the following amounts:

    • (a) the adjusted solvency asset amount,

    • (b) the present value of special payments made under section 21 if at least one of those payments is due more than five years after the valuation date, and

    • (c) the present value of the going concern special payments that were used to fund the initial solvency deficiency that are due during the period beginning on the valuation date and ending on the 10th anniversary of the date of emergence of the initial solvency deficiency if at least one of those payments is due more than five years after the valuation date.

  • (2) The interest rate used to determine the present value of the special payments referred to in subsection (1) is the same as the interest rate used to determine the solvency liabilities.

  • SOR/2010-149, s. 24

Failure To Pay Letter of Credit

 On receipt of the notice from a holder that an issuer has not paid the face amount of a letter of credit after a demand for payment has been made, the employer shall remit to the pension fund, no later than 30 days after the day on which the demand for payment was made, an amount equal to the face amount of that letter of credit.

Occurrence of Default

  •  (1) If a default occurs, the amount by which the aggregate amount of special payments that would have been made to the pension fund in accordance with section 9 of the Pension Benefits Standards Regulations, 1985 from the day on which the deficiency emerged, as adjusted to take into account the reductions in special payments resulting from the application of those Regulations, plus interest, exceeds the aggregate amount of special payments made to the pension fund in accordance with Part 1 and this Part, plus interest, shall immediately be remitted to the pension fund.

  • (2) Except if a plan is fully terminated, the administrator shall have an actuarial report prepared — in which the present value of the special payments referred to in subsection 21(1) shall be zero — valuing the plan as at the last day of the plan year in which the default occurs.

  • (3) Any remaining deficiency disclosed by the actuarial report prepared in accordance with subsection (2), which shall be calculated by including as an asset any amount remitted in accordance with subsection (1), shall be considered to have emerged on the day on which the deficiency emerged.

  • (4) The remaining deficiency calculated under subsection (3) shall be funded by special payments sufficient to liquidate that deficiency by equal annual payments over a period not exceeding five years minus the number of years that the plan was funded in accordance with Part 1 and this Part.

  • SOR/2010-149, s. 25
  • SOR/2011-85, s. 27
  • SOR/2015-60, s. 51(F)

Ceasing 10 - year Funding

  •  (1) A plan may cease to be funded in accordance with this Part, beginning on the first day of a plan year, if

    • (a) the administrator gives written notice to the Superintendent not later than six months after the beginning of that plan year;

    • (b) the amount by which the aggregate amount of special payments that would have been made to the pension fund in accordance with section 9 of the Pension Benefits Standards Regulations, 1985 from the day on which the deficiency emerged, as adjusted to take into account the reductions in special payments resulting from the application of those Regulations, plus interest, exceeds the aggregate amount of special payments made to the pension fund in accordance with Part 1 and this Part, plus interest, is remitted to the pension fund at least 30 days before the plan’s year end; and

    • (c) an actuarial report is prepared in accordance with subsection 31(2) and any remaining deficiency is calculated and funded in accordance with subsections 31(3) and (4) as if a default had occurred, except that the actuarial report shall value the plan as at the first day of the plan year in which funding ceases.

  • (2) Paragraphs (1)(b) and (c) do not apply if the face amount of the letters of credit obtained to fund the plan under this Part is included as a solvency asset as defined in subsection 2(1) of the Pension Benefit Standards Regulations, 1985.

  • SOR/2010-149, s. 26
  • SOR/2011-85, s. 28
  • SOR/2015-60, s. 52(F)

Cease to Be in Force

 These Regulations cease to be in force on November 1, 2019.

Coming into Force

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

 
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