Canadian Press Pension Plan Solvency Deficiency Funding Regulations, 2010

Link to law: http://laws-lois.justice.gc.ca/eng/regulations/SOR-2010-245/FullText.html

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Canadian Press Pension Plan Solvency Deficiency Funding Regulations, 2010

SOR/2010-245PENSION BENEFITS STANDARDS ACT, 1985
Registration 2010-10-28
Canadian Press Pension Plan Solvency Deficiency Funding Regulations, 2010
P.C. 2010-1357 2010-10-28His 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, hereby makes the annexed Canadian Press Pension Plan Solvency Deficiency Funding Regulations, 2010.

Return to footnote aS.C. 2010, c. 12, s. 1820
Return to footnote bR.S., c. 32 (2nd Supp.)
Interpretation

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

Act
Act means the Pension Benefits Standards Act, 1985. (Loi)
aggregate amount of deferred special payments
aggregate amount of deferred special payments means the sum of the amounts considered to be owed to the pension fund under section 8 of the Canadian Press Pension Plan Solvency Deficiency Funding Regulations and the portion of special payments that have been deferred under subsection 6(1) of the Solvency Funding Relief Regulations, including interest. (total des paiements spéciaux différés)
beneficiary

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

(a) a former member who has transferred all of their pension benefit credits under section 26 of the Act;
(b) a former member who used their pension benefit credits to purchase a life annuity under section 26 of the Act;
(c) a former member who has had their pension benefits transferred to another plan; and
(d) a former member for whom the administrator has purchased an immediate or deferred life annuity. (bénéficiaire)

Canadian Press pension plan
Canadian Press pension plan means the Canadian Press Pension Plan for Employees Represented by the Canadian Media Guild, registered under the Act as number 56945 and the Pension Plan of the Canadian Press, registered under the Act as number 56457. (régime de retraite de la Presse canadienne)
subsidized portion of early retirement benefits
subsidized portion of early retirement benefits means the amount by which an early retirement benefit that is payable to a former member under the Canadian Press pension plan with the consent of the employer or the administrator exceeds the amount of an early retirement benefit that would have been payable to that member without that consent. (partie subventionnée des prestations de retraite anticipée)

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

Application

2 (1) These Regulations apply to the Canadian Press pension plan if, within 30 days after the day on which these Regulations come into force

(a) the employer provides a written statement to the Superintendent confirming that the information set out in section 3 has been provided to the beneficiaries and that less than one third of the members of the plan have objected and less than one third of the beneficiaries excluding members have objected to their plan being subject to these Regulations and that the plan will meet the solvency standards set out in these Regulations;
(b) the administrator provides written notice to the Superintendent and the beneficiaries that the plan will be funded in accordance with these Regulations;
(c) the employer provides a declaration to the Superintendent stating that the employer has assumed all the liabilities of the plan and acknowledging that it owes the aggregate amount of deferred special payments; and
(d) the employer provides written confirmation to the Superintendent that it has received an initial investment of $2.25 million.

(2) Subsection 6(1) and sections 11 and 12 of the Solvency Funding Relief Regulations do not apply to the Canadian Press pension plan.

SOR/2015-60, s. 53(E).
Previous Version

Provision of Information to Beneficiaries

3 (1) The administrator shall provide the beneficiaries with the following information:

(a) the solvency ratio of the plan as at December 31, 2008 and December 31, 2009 and the estimated solvency ratio as at June 30, 2010;
(b) the amount by which the solvency liabilities exceed the solvency assets of the plan as at December 31, 2008 and December 31, 2009 and the estimated amount by which the solvency liabilities exceed the solvency assets as at June 30, 2010;
(c) a description of the extent to which the beneficiaries’ benefits would be reduced if the plan were fully terminated and wound up with the estimated solvency ratio as at June 30, 2010;
(d) a statement indicating that the application of these Regulations to the plan may result in a reduction of benefits as compared to those that the beneficiaries were entitled to receive as at June 30, 2010; and
(e) a statement indicating that the subsidized portion of early retirement benefits may only be paid if the aggregate amount of the subsidized portion does not result in the reduction of the solvency ratio as at December 31, 2008 by more than 10%.

(2) If the costs of compliance with subsection (1) are paid out of the Canadian Press pension plan, the employer shall reimburse the plan with an amount equal to those costs within 30 days of the coming into force of these Regulations.

Funding

4 Despite section 8 of the Pension Benefits Standards Regulations, 1985, the Canadian Press pension plan meets the standards for solvency if the funding of the plan is in accordance with these Regulations.

Funding Rules for 2010 and Subsequent Plan Years

5 (1) The solvency deficiency as at December 31, 2009 is determined to be the amount by which the solvency liabilities exceed the sum of the solvency assets, not including the amounts deferred under section 7 of the Canadian Press Pension Plan Solvency Deficiency Regulations, and the present value of the going concern special payments payable for the period beginning on January 1, 2010 and ending December 31, 2023.

(2) On December 1, 2010, the Canadian Press pension plan shall be funded by a payment equal to the aggregate of

(a) a amount equal to one sixth of one of the equal annual solvency special payments that would be sufficient to liquidate the solvency deficiency determined as at December 31, 2009 over 14 years;
(b) an amount equal to one sixth of the going concern special payments determined as at or before December 31, 2009 adjusted to exclude the special payments deferred under section 7 of the Canadian Press Pension Plan Solvency Deficiency Regulations from the going concern assets; and
(c) by a contribution equal to the normal cost of the plan.

(3) Beginning on January 1, 2011, the plan shall be funded by monthly payments equal to the aggregate of the following amounts:

(a) an amount equal to one twelfth of one of the equal annual solvency special payments that would be sufficient to liquidate the solvency deficiency determined on December 31, 2009 over 14 years;
(b) an amount equal to one twelfth of the going concern special payments determined as at or before December 31, 2009 adjusted to exclude the special payments deferred under section 7 of the Canadian Press Pension Plan Solvency Deficiency Regulations from the going concern assets; and
(c) by a contribution equal to the normal cost of the plan.

Funding Rules for 2011 and Subsequent Plan Years

6 For the 2011 plan year , the Canadian Press pension plan shall be funded in accordance with section 9 of the Pension Benefits Standards Regulations, 1985 with the following modifications:

(a) the unfunded liability is the amount by which the going concern deficit determined as at December 31, 2010 exceeds the sum of

(i) the present value of going concern special payments referred to in paragraph 5(3)(b); and
(ii) the present value of solvency special payments referred to paragraph 5(3)(a);

(b) the solvency deficiency on December 31, 2010 shall be determined as the amount by which the solvency liabilities exceed the sum of

(i) the solvency assets,
(ii) the present value of going concern special payments payable for the period beginning on January 1, 2010 and ending on December 31, 2023, and
(iii) the present value of solvency special payments referred to in paragraph 5(3)(a); and

(c) the solvency special payments shall be sufficient to liquidate the solvency deficiency by equal annual payments over 13 years.

Funding Rules for 2012 and Subsequent Plan Years

7 For the 2012 and subsequent plan years, the Canadian Press pension plan shall be funded in accordance with section 9 of the Pension Benefits Standards Regulations, 1985 with the following modifications:

(a) the unfunded liability determined as at a valuation date after December 31, 2010 is the amount by which the going concern deficit determined as at that valuation date exceeds the sum of

(i) the present value of going concern special payments determined in respect of any plan year after the valuation date, and
(ii) the present value of solvency special payments referred to in paragraphs 5(3)(a) and 6(c) that are payable after the valuation date;

(b) the solvency deficiency, determined as at a valuation date after December 31, 2010, is the amount by which the solvency liabilities exceed the sum of

(i) the adjusted solvency asset amount, and
(ii) the present value of going concern special payments determined before January 1, 2011 that are payable after the valuation date but no later than December 31, 2023, and
(iii) the present value of solvency special payments referred to in paragraphs 5(3)(a) and 6(c) that are payable after the valuation date; and

(c) if there is a solvency deficiency as at a valuation date, the annual solvency special payments to fund this deficiency for the plan year following the valuation date shall be equal to the amount determined in accordance with the following formula:

A/B – C
where


is the solvency deficiency,


is the greater of
(i) the number of years in the period beginning on the valuation date and ending on December 31, 2023,
(ii) five, and


is the going concern special payments determined after December 31, 2010 and payable in the plan year following the valuation date.

SOR/2015-60, s. 54.
Previous Version

Reduction of Aggregate Amount of Deferred Special Payments

8 The aggregate amount of deferred special payments shall be reduced by any special payment paid to the pension fund.

Application of Gains

9 (1) A solvency gain that emerges on December 31, 2010 shall be calculated as the amount by which the sum of the following amounts exceeds the solvency liabilities:

(a) the solvency assets;
(b) the present value of the going concern special payments that are payable for the period beginning on January 1, 2011 and ending on December 31, 2023; and
(c) the present value of the solvency special payments referred to in paragraph 5(3)(a) established on December 31, 2009 and payable after December 31, 2010.

(2) A solvency gain that emerges after December 31, 2010 shall be calculated as the amount by which the sum of the following amounts exceed the solvency liabilities:

(a) the adjusted solvency asset amount;
(b) the present value of the going concern special payments determined before January 1, 2011 that are payable for the period beginning on January 1, 2011 and ending on December 31, 2023; and
(c) the present value of the solvency special payments referred to in paragraphs 5(3)(a) and 6(c) determined as at December 31, 2009 and December 31, 2010 that are payable after the valuation date.

(3) For valuation dates after December 31, 2009, if there is a solvency gain, this gain may be applied to reduce the outstanding balance of any solvency deficiency determined before January 1, 2011 and the special payments determined to liquidate that solvency deficiency, which become due at the latest dates in the payment schedule, may be eliminated or reduced in such a way that the present value of the special payments is reduced by the amount of reduction applied to the outstanding balance of the solvency deficiency.

Early Retirement Benefits

10 (1) If the aggregate value of the subsidized portion of early retirement benefits consented to since January 1, 2009 reduces the solvency ratio of a Canadian Press pension plan as at December 31, 2008 by more than 10%, the employer shall immediately pay to the pension fund an amount that would restore the solvency ratio to the value as at December 31, 2008 minus 10% and shall immediately notify the Superintendent in writing of the payment.

(2) For the purpose of subsection (1), the solvency ratio has been reduced by more than 10% if

(A – B)/A > 0.10
where


is the solvency ratio determined as at December 31, 2008; and


is the solvency ratio determined as at December 31, 2008 taking into consideration the aggregate value of the subsidized portion of early retirement benefits consented to since January 1, 2009.

SOR/2015-60, s. 55(F).
Previous Version

11 (1) The amount of any secured borrowing obtained by the employer once it has obtained an aggregate of $1.5 million of secured borrowing after January 31, 2009 must be subordinated to the aggregate amount of deferred special payments.
(2) If the employer does not comply with subsection (1), it shall immediately notify the Superintendent in writing of its non-compliance and immediately pay to the pension fund the aggregate amount of deferred special payments. These Regulations will then no longer apply.

SOR/2015-60, s. 56(F).
Previous Version

Void Amendments

12 For the purposes of paragraph 10.1(2)(d) of the Act, the prescribed solvency ratio level is one.

Statement of Investment Policies and Procedures

13 Despite subsection 7.2(1) of the Pension Benefits Standards Regulations, 1985, the administrator shall review and confirm or amend the statement of investment policies and procedures referred to in subsection 7.1(1) of those Regulations at least once every quarter.

Information to Be Provided

14 For the purpose of subsection 12(2) of the Act, the administrator shall file with the Superintendent

(a) the financial statements of the employer; and
(b) a copy of the minutes of Board of Director meetings documenting results of reviews of the statement of investment policies and procedures.

15 (1) The written statement to be provided under paragraph 28(1)(b) of the Act shall, in addition to the information referred to in subsection 23(1) of the Pension Benefits Standards Regulations, 1985, include

(a) the aggregate value of the subsidized portion of early retirement benefits consented to in the preceding plan year and the number of members who were granted subsidized early retirement in the preceding plan year;
(b) the rate of return of the plan’s portfolio of investments and loans for the previous plan year and the asset mix as at the last plan year end;
(c) the amount that the employer paid to the pension fund during the preceding plan year; and
(d) the amount that the employer would have paid to the pension fund in the absence of these Regulations based on the most recently filed actuarial report under subsection 12(2) of the Act.

(2) The written statement required to be provided in accordance with paragraph 28(1)(b.1) of the Act shall include all information referred to in paragraphs (1)(b) to (d).

Termination of Plan

16 On the termination of the whole of the Canadian Press pension plan, the aggregate amount of deferred special payments, less any reductions made under section 8, shall be immediately paid to the pension fund.

Ceasing Funding

17 (1) The employer may cease to be governed by these Regulations if it gives written notice to the Superintendent.

(2) If notice is given on or before December 31, 2018

(a) these Regulations, other than this subsection, cease to apply effective the first plan year following the date of the notice;
(b) the aggregate amount of deferred special payments shall be paid into the pension fund in equal monthly instalments during the first plan year following the date of the notice; and
(c) the actuarial report required under subsection 12(2) of the Act shall not include the present value of the special payments determined under these Regulations.

(3) If notice is given after December 31, 2018

(a) these Regulations, other than this subsection, cease to apply effective the first plan year following the date of the notice;
(b) the aggregate amount of deferred special payments shall be paid to the pension fund in equal monthly instalments during the first plan year following the date of the notice
(c) the special payments determined under section 7 shall continue to be made.

Transitional Provision

18 Despite section 13 of the Canadian Press Pension Plan Solvency Deficiency Funding Regulations, the obligation to pay or remit deferred special payments to the pension fund under section 7 of those Regulations is deferred until December 1, 2010. Special payments and normal costs that have been deferred until that date and that have not been paid into the pension fund shall be considered to be owed to the pension fund under section 8 of the Canadian Press Pension Plan Solvency Deficiency Funding Regulations.

Cease to Be in Force

19 These Regulations cease to be in force on January 1, 2024.

Repeal

20 [Repeal]

Coming into Force

*21 (1) These Regulations, other than subsection 15(2), come into force on November 1, 2010.
(2) Subsection 15(2) of these Regulations comes into force on the day on which subsection 1815(2) of the Jobs and Economic Growth Act, chapter 12 of the Statutes of Canada, 2010, comes into force.

Return to footnote *[Note: Subsection 15(2) in force April 1, 2011, see SI/2011-21.]