Aveos Pension Plan Regulations

Link to law: http://laws-lois.justice.gc.ca/eng/regulations/SOR-2013-132/FullText.html

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Aveos Pension Plan Regulations

SOR/2013-132PENSION BENEFITS STANDARDS ACT, 1985
Registration 2013-06-12
Aveos Pension Plan Regulations
P.C. 2013-798 2013-06-12His Excellency the Governor General in Council, on the recommendation of the Minister of Finance, pursuant to section 39Footnote a of the Pension Benefits Standards Act, 1985Footnote b, makes the annexed Aveos Pension Plan Regulations.

Return to footnote aS.C. 2012, c. 16, s. 89
Return to footnote bR.S., c. 32 (2nd Supp.)
Interpretation

Marginal note:Definitions

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

Act
Loi

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

assets of the plan
éléments d’actif du régime

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

former member
ancien participant

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

life income fund
fonds de revenu viager

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

locked-in registered retirement savings plan
régime enregistré d’épargne-retraite immobilisée

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

plan
régime

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

Marginal note:Interpretation

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

Marginal note:Transfer options

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

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

(i) provides that the funds may only be

(A) transferred to another locked-in registered retirement savings plan,
(B) transferred to a life income fund, or
(C) used to purchase an immediate life annuity or a deferred life annuity,

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

(A) transferring the funds to another locked-in registered retirement savings plan,
(B) transferring the funds to a life income fund, or
(C) using the funds to purchase an immediate life annuity or a deferred life annuity,

(iii) provides that, subject to subsection 25(4) of the Act, the funds, and any interest or right in those funds, must not be transferred, charged, attached, anticipated or given as security and that any transaction appearing to do so is void or, in Quebec, null,
(iv) provides that, if the assets of the plan that were transferred into the locked-in registered retirement savings plan were not varied according to the sex of the plan member, an immediate life annuity or a deferred life annuity purchased with the funds accumulated in the locked-in registered retirement savings plan must not differentiate as to sex,
(v) contains a statement as to whether the assets of the plan that were transferred were varied according to the sex of the plan member, and
(vi) sets out the method of determining the value of the locked-in registered retirement savings plan, including the valuation method used to establish its value on the date of death of the holder of the locked-in registered retirement savings plan or on the date of transfer of assets from the locked-in registered retirement savings plan; or

(b) a life income fund that

(i) provides that the funds may only be

(A) transferred to a locked-in registered retirement savings plan,
(B) transferred to another life income fund, or
(C) used to purchase an immediate life annuity or a deferred life annuity,

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

(A) transferring the funds to a locked-in registered retirement savings plan,
(B) transferring the funds to another life income fund, or
(C) using the funds to purchase an immediate life annuity or a deferred life annuity,

(iii) sets out the method of determining the value of the life income fund, including the valuation method used to establish its value on the date of death of the holder of the life income fund or on the date of transfer of assets from the life income fund,
(iv) provides that the holder of the life income fund must, at the beginning of each calendar year or at any other time agreed to by the financial institution with whom the contract or arrangement was entered into, decide the amount to be paid out of the life income fund in that year,
(v) provides that in the event that the holder of the life income fund does not decide the amount to be paid out of the life income fund in a calendar year, the minimum amount determined in accordance with the Income Tax Act must be paid out of the life income fund in that year,

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

C/F
where


is the balance in the life income fund
(A) at the beginning of the calendar year, or
(B) if the amount determined under clause (A) is zero, at the date when the assets of the plan were transferred into the life income fund, and


is the value, as at the beginning of the calendar year, of a pension benefit of which the annual payment is $1, payable on January 1 of each year between the beginning of that calendar year and December 31 of the year in which the holder reaches 90 years of age, established using an interest rate that
(A) for the first 15 years after January 1 of the year in which the life income fund is valued, is less than or equal to the monthly average yield on Government of Canada marketable bonds of maturity over 10 years, as published by the Bank of Canada, for the second month before the beginning of the calendar year, and
(B) for any subsequent year, is not more than 6%,

(vii) provides that, for the calendar year in which the holder of the life income fund reaches 90 years of age and for all subsequent calendar years, the amount of income paid out of the life income fund must not exceed the value of the funds held in the fund immediately before the date of the payment,
(viii) provides that, for the calendar year in which the contract or arrangement was entered into, the amount of income paid out of the life income fund, as referred to in subparagraph (vi) or (vii), as the case may be, must be multiplied by the number of months remaining in that year and then divided by 12, with any part of an incomplete month counting as one month,
(ix) provides that if, on the day on which the life income fund was established, part of the life income fund was composed of funds that had been held in another life income fund of the holder earlier in the calendar year in which the fund was established, the amount of income paid out of the life income fund, as referred to in subparagraph (vi) or (vii) as the case may be, is deemed to be zero in respect of that part of the life income fund for that calendar year;
(x) provides that, subject to subsection 25(4) of the Act, the funds, and any interest or right in those funds, must not be transferred, charged, attached, anticipated or given as security and that any transaction appearing to do so is void or, in Quebec, null,
(xi) contains a statement as to whether the assets of the plan that were transferred were varied according to the sex of the plan member, and
(xii) provides that, if the assets of the plan that were transferred into a life income fund were not varied according to the sex of the plan member, an immediate life annuity or a deferred life annuity purchased with the funds accumulated in the life income fund must not differentiate as to sex.

Marginal note:Form and time limit

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

Marginal note:Disclosure

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

(a) indicates the transfer options set out in section 2;
(b) describes the restrictions applicable to those transfer options;
(c) informs the former member or survivor that, if they do no make a request under section 2, the administrator must purchase a life annuity on their behalf;

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

(i) that the amount of pension income could be significantly reduced if the future investment performance is lower than expected; and
(ii) that the income produced could be insufficient to provide the same retirement income that would otherwise have been received even if the future investment performance equals or exceeds the return that was expected; and

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

Marginal note:Assets attributable to a former member

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

A - B + C
where


is the commuted value of the former member’s pension as of the effective date of the termination of the plan determined in accordance with section 3500 of the Standards of Practice of the Actuarial Standards Board, published by the Canadian Institute of Actuaries, as amended from time to time,


is the sum of any pension payments made from the effective date of the termination of the plan until the day on which the transfer is made, and


is the amount of any accumulated interest, calculated at the rate that is used in the termination report to calculate the commuted value of pension benefits, from the effective date of the termination of the plan to the beginning of the month in which the transfer is made.



Coming into Force

Marginal note:Registration

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

SCHEDULE(Section 2)

FORM 1Transfer Request

Request to transfer

I, ,
(check (a) or (b))
(a) former member of the Aveos Fleet Performance Inc. pension plan, (certificate of registration number 57573 issued by the Superintendent of Financial Institutions and Canada Revenue Agency registration number 1198944), request to transfer the assets of the plan that are attributable to me,
(check (i) or (ii))

(i)  to a locked-in registered retirement savings plan of the kind described in the Aveos Pension Plan Regulations;
(ii)  to a life income fund of the kind described in the Aveos Pension Plan Regulations;

(b) survivor of , former member of the Aveos Fleet Performance Inc. pension plan, (certificate of registration number 57573 issued by the Superintendent of Financial Institutions and Canada Revenue Agency registration number 1198944), request to transfer the assets of the plan that are attributable to the former member,
(check (i) or (ii))

(i)  to a locked-in registered retirement savings plan of the kind described in the Aveos Pension Plan Regulations,
(ii)  to a life income fund of the kind described in the Aveos Pension Plan Regulations.

Acknowledgement

I understand that even if the future investment performance equals or exceeds the return that was expected, it is possible that the income produced following the transfer of the assets of the plan will be insufficient to provide the same lifetime retirement income that I, or my spouse or common-law partner, if applicable, would otherwise have received if I had not elected to make the transfer.
In choosing this transfer, I understand that if the future investment performance is lower than expected, the amount of pension income that I, or my spouse or common-law partner, if applicable, will receive could be significantly reduced.
Signatures

Signature of requester
Name of requester
Signature of witness
Name of witness
Address of witness
Signed at on the day of , 20.
Confirmation of receipt of the request by the administrator of the plan

(name of the administrator of the plan) confirm receipt of the request of (name of requester) for the
(check (a) or (b))

(a)  transfer of the assets of the plan that are attributable to the former member to a locked-in registered retirement savings plan of the kind described in the Aveos Pension Plan Regulations;
(b)  transfer of the assets of the plan that are attributable to the former member to a life income fund of the kind described in the Aveos Pension Plan Regulations.

Signature

Signature of administrator of the plan
Name of administrator of the plan
Signed at on the day of , 20.

FORM 2Consent of Spouse or Common-Law Partner

I, , certify that I am the spouse or common-law partner (as those terms are defined in the Pension Benefits Standards Act, 1985) of .
I understand that my spouse or common-law partner has elected to transfer the assets of the Aveos Fleet Performance Inc. pension plan, (certificate of registration number 57573 issued by the Superintendent of Financial Institutions and Canada Revenue Agency registration number 1198944), that are attributable to him or her, and that my written consent is required to enable my spouse or common-law partner to do so.
I understand that
(a) the transferred funds may be used to purchase a life annuity at a later date;
(b) 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 start of the annuity;
(c) a transfer of the assets of the plan into a life income fund under the Aveos Pension Plan Regulations will allow my spouse or common-law partner to withdraw some of the money each year, subject to minimum and maximum withdrawal limits as prescribed by the Pension Benefits Standards Act, 1985 and the Income Tax Act;
(d) the amount of pension income or the amount available to me on the death of my spouse or common-law partner may be significantly reduced if
(i) my spouse or common-law partner elects to withdraw the maximum amount permitted each year, or
(ii) the investment performance is lower than expected; and
(e) it is possible that the income produced following the transfer of the assets of the plan will be insufficient to provide the same lifetime retirement income I would otherwise have received had my spouse or common-law partner not elected to make the transfer.
Nevertheless, I consent to the transfer 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) my spouse or common-law partner is not present while I am signing this form; and
(d) I realize that
(i) this form only gives a general description of the legal rights I have under the Pension Benefits Standards Act, 1985, the Pension Benefits Standards Regulations, 1985 and the Aveos Pension Plan Regulations,
(ii) if I wish to understand exactly what my legal rights are I must read the Pension Benefits Standards Act, 1985, the Pension Benefits Standards Regulations,1985 and the Aveos Pension Plan Regulations, or seek legal advice, or both, and
(iii) I am entitled to a copy of this consent form.
To consent to the transfer, I sign this consent form at on the day of , 20.
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 the signing of this consent by in the absence of his/her spouse or common-law partner.
Signature of witness
(home telephone number)
(work telephone number)