O. Reg. 322/09: GENERAL

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ontario regulation 322/09

made under the

Pension Benefits Act

Made: August 24, 2009
Filed: August 25, 2009
Published on e-Laws: August 27, 2009
Printed in The Ontario Gazette: September 12, 2009

Amending Reg. 909 of R.R.O. 1990

(General)

1. Subsection 5.1 (12) of Regulation 909 of the Revised Regulations of Ontario, 1990 is revoked and the following substituted:

(12) An employer may at any time file a written notice of rescission of an election filed under subsection (1) or (2) and the rescission is effective on the day the written notice is filed.

2. (1) Paragraph 1 of subsection 5.6 (6) of the Regulation is revoked and the following substituted:

1. If there was a new solvency deficiency or the administrator elected Option 2 and, on a valuation date after the valuation date of the solvency relief report, the sum of the solvency assets and the solvency asset adjustment exceeds the sum of the solvency liabilities, the solvency liability adjustment and the prior year credit balance (such excess being referred to in this paragraph as the “solvency excess”), the special payments or amortization periods under subsection 5 (1) with respect to the new solvency deficiency and the consolidated prior solvency deficiency or the amortization period with respect to any solvency deficiency arising after the valuation date of the solvency relief report may be adjusted in accordance with the following rules:

i. The special payments are reduced to zero if the solvency excess is greater than or equal to the sum of,

A. the present value of the special payments with respect to the new solvency deficiency, if applicable,

B. the present value of the special payments with respect to the consolidated prior solvency deficiency, if applicable, and

C. the present value of the special payments with respect to any solvency deficiency arising after the valuation date of the solvency relief report.

ii. If the solvency excess is less than the sum of the present value of the special payments described in sub-subparagraphs i A, B and C, the solvency excess may be applied to reduce any of the following in order to reduce the solvency excess to zero:

A. The special payments with respect to the new solvency deficiency over the amortization period set out in the solvency relief report.

B. The special payments with respect to the consolidated prior solvency deficiency over the amortization period set out in the solvency relief report.

C. The amortization period for the special payments with respect to the new solvency deficiency.

D. The amortization period for the special payments with respect to the consolidated prior solvency deficiency.

E. The amortization period for the special payments with respect to any solvency deficiency arising after the valuation date of the solvency relief report.

(2) Subparagraph 3 ii of subsection 5.6 (6) of the Regulation is revoked and the following substituted:

ii. the solvency asset adjustment for the new solvency deficiency must be adjusted as follows:

A. If a benefit allocation method is used to set contribution rates for the plan, the solvency asset adjustment under clause 1.2 (1) (d) for the new solvency deficiency must include the present value of all special payments required to be made in respect of any going concern unfunded liability that are scheduled for payment within the period that begins on the valuation date of the solvency relief report and ends at the end of the five-year amortization period chosen by the administrator in accordance with subparagraph i.

B. If a benefit allocation method is not used to set contribution rates for the plan, the solvency asset adjustment under subsection 1.2 (2) for the new solvency deficiency must be determined as if “C” in the definition of “B” in that subsection were the present value of the required contributions, which are determined using the actuarial cost method adopted by the plan, for the period that begins on the valuation date of the solvency relief report and ends at the end of the five-year amortization period chosen by the administrator in accordance with subparagraph i.

(3) Paragraph 6 of subsection 5.6 (6) of the Regulation is amended by striking out “solvency report” and substituting “solvency relief report”.

(4) Paragraphs 8, 9 and 10 of subsection 5.6 (6) of the Regulation are revoked and the following substituted:

8. If the plan is not a jointly sponsored pension plan, a benefit allocation method is used to set contribution rates for the plan and the administrator elects Option 3,

i. the period under subsection 5 (1) in which the new solvency deficiency must be liquidated begins on the valuation date of the solvency relief report and ends on a day not more than 10 years after that day,

ii. the solvency asset adjustment under clause 1.2 (1) (d) for the new solvency deficiency must include the present value of all special payments required to be made in respect of any going concern unfunded liability that are scheduled for payment during the period that begins on the valuation date of the solvency relief report and ends at the end of the period referred to in subparagraph i, and

iii. the solvency asset adjustment under clause 1.2 (1) (d) for a solvency deficiency determined in a report under section 3 or 14 (called the “subsequent report” in this subparagraph and subparagraph 10 iii) for a valuation date after the valuation date of the solvency relief report but before the day on which the new solvency deficiency is liquidated, must include,

A. the present value of special payments referred to in subsection 5 (1) with respect to any going concern unfunded liability arising on or before the valuation date of the solvency relief report that are scheduled for payment within the period that begins on the valuation date of the subsequent report and ends at the end of five years or at the end of the period in which the new solvency deficiency is liquidated, whichever period is longer, and

B. the present value of special payments with respect to the new solvency deficiency that are scheduled for payment within the period that begins on the valuation date of the subsequent report and ends at the end of the period in which the new solvency deficiency is liquidated.

8.1 If the plan is not a jointly sponsored pension plan, a benefit allocation method is not used to set contribution rates for the plan and the administrator elects Option 3,

i. the period under subsection 5 (1) in which the new solvency deficiency must be liquidated begins on the valuation date of the solvency relief report and ends on a day not more than 10 years after that day,

ii. the solvency asset adjustment under subsection 1.2 (2) for the new solvency deficiency must be determined as if “C” in the definition of “B” in that subsection were the present value of the required contributions, which are determined using the actuarial cost method adopted by the plan, for the period that begins on the valuation date of the solvency relief report and ends at the end of the period referred to in subparagraph i, and

iii. the solvency asset adjustment under subsection 1.2 (2) for a solvency deficiency determined in a report under section 3 or 14 (called the “subsequent report” in this subparagraph and subparagraph 10 iv) for a valuation date that is after the valuation date of the solvency relief report but before the new solvency deficiency is liquidated must be determined as if “B” in that subsection is the greater of zero and the amount calculated using the formula,

A + B – C + D

in which,

“A” is the present value of required contributions, determined using the actuarial cost method adopted by the plan, for the five-year period that begins on the valuation date of the subsequent report,

“B” is the present value of any special payments described in clause 5 (1) (e), other than special payments required to liquidate a solvency deficiency determined in the subsequent report,

“C” is the present value of the normal cost, which is determined using a benefit allocation method, for the period described in the definition of “A”, and

“D” is zero, if the period defined as “E” ends not later than the end of the period described in the definition of “A” or, if the period defined as “E” ends after the end of the period described in the definition of “A”, “D” is the lesser of “F” and “G”, where,

“E”  is the period that begins on the valuation date of the subsequent report and ends at the end of the period in which the new solvency deficiency is liquidated,

“F”  is the amount by which the difference between the present value of required contributions, determined using the actuarial cost method adopted by the plan, for the period defined as “E” and the amount of “A” exceeds the difference between the present value of the normal cost, determined using a benefit allocation method, for the period defined as “E” and the amount of “C”, and

“G”  is the amount by which the present value of the imputed going concern special payments for the period defined as “E” exceeds the present value of the imputed going concern special payments for the period described in the definition of “A”.

9. If the plan is not a jointly sponsored pension plan and the administrator elects both Options 1 and 3, paragraphs 8 and 8.1 apply with the following modifications:

i. The period described in subparagraphs 8 i and 8.1 i is deemed for the purposes of this paragraph to be the period beginning on a day that is not more than 12 months after the valuation date of the solvency relief report and ending on a day not more than 10 years after that day.

ii. References in subparagraphs 8 ii and 8.1 ii to the period referred to in subparagraph 8 i or 8.1 i are deemed to be references to the period described in subparagraph i of this paragraph.

10. If the plan is a jointly sponsored pension plan and the administrator elects Option 3, paragraphs 8 and 8.1 apply with the following modifications:

i. The period described in subparagraphs 8 i and 8.1 i is deemed for the purposes of this paragraph to be the period beginning on a day that is not more than 12 months after the valuation date of the solvency relief report and ending on a day not more than 10 years after that day.

ii. References in subparagraphs 8 ii and 8.1 ii to the period referred to in subparagraph 8 i or 8.1 i are deemed to be references to the period described in subparagraph i of this paragraph.

iii. The period described in sub-subparagraph 8 iii A is deemed to end at the end of the period in which the new solvency deficiency is liquidated or at the end of a five-year period that begins on a day not more than 12 months after the valuation date of the subsequent report, whichever is later.

iv. The five-year period described in the definition of “A” in subparagraph 8.1 iii is deemed to be the period that begins on the valuation date of the subsequent report and ends at the end of a five-year period that begins on a day not more than 12 months after the valuation date of the subsequent report.

v. References to the period described in the definition of “A” contained in the definitions of “C” and “D” in subparagraph 8.1 iii and in the definition of “G” in the definition of “D” in subparagraph 8.1 iii are deemed to be references to the period that would be determined when subparagraph iv applies.

vi. References to the amount of “A” and to the amount of “C” in the definition of “F” in the definition of “D” in subparagraph 8.1 iii are deemed to be references to the amounts of “A” and “C” that would be determined when subparagraph iv applies.

(5) Section 5.6 of the Regulation is amended by adding the following subsection:

(6.1) The following applies for the purposes of the definition of “G” in the definition of “D” in subparagraph 8.1 iii:

1. For the purposes of paragraphs 2 and 3, an imputed going concern unfunded liability in respect of a solvency relief report for a plan for which a benefit allocation method is not used to set contribution rates for the plan is the amount by which “H” exceeds “J” where,

“H” is the present value, as of the valuation date of the plan’s solvency relief report, of the monthly contributions determined using the actuarial cost method adopted by the plan for a period of 15 years beginning on the valuation date of the plan’s solvency relief report, and

“J” is the present value of the normal cost determined using a benefit allocation method over the period described in the definition of “H”.

2. The imputed going concern special payments in respect of a plan that is not a jointly sponsored pension plan are the monthly contributions that would be required to amortize the imputed going concern unfunded liability over a period of 15 years, calculated using the going concern valuation interest rate or rates.

3. In the case of a plan that is a jointly sponsored pension plan,

i. the amount required to amortize the imputed going concern unfunded liability determined in the solvency relief report is determined as a level percentage of pensionable earnings, and

ii. the amount of the imputed going concern unfunded liability in the plan’s solvency relief report is determined under paragraph 1 as if the amounts of “H” and “J” were calculated based on the total projected pensionable earnings for the period of 15 years that begins on the valuation date of the solvency relief report.

(6) Subsection 5.6 (7) of the Regulation is amended by striking out the portion before paragraph 1 and substituting the following:

(7) An administrator who makes an election must send a notice containing the following information to every person who is an eligible member or an eligible former member on the day the notice is sent and to every collective bargaining agent that represents eligible members on that day:

. . . . .

(7) Section 5.6 of the Regulation is amended by adding the following subsection:

(7.1) The notice required under subsection (7) must be sent on or before the later of,

(a) the 60th day after the first day a special payment is required to be made in respect of the new solvency deficiency or the new going concern unfunded liability; and

(b) the 60th day after the solvency relief report is required to be filed.

3. Section 36 of the Regulation is revoked.

4. The Regulation is amended by adding the following section:

47.5 Paragraph 3 of subsection 5.6 (4), paragraph 8 of subsection 5.6 (7) and section 5.7 do not apply in respect of the following plans:

1. Chrysler Canada Inc. Salaried Employees’ Retirement Plan (Registration No.:  0337774).

2. DaimlerChrysler Canada Inc. - CAW Non-Contributory Pension Plan for Hourly Employees - CAW Locals 444, 1090, 1459, 1498 and Local 1285 (Bramalea) (Registration No.:  0337782).

3. Parts Distribution Centres Non Contributory Pension Plan (Registration No.:  0337808).

4. Plant Guards and Nurses Non Contributory Pension Plan (Registration No.:  0992032).

5. (1) Subject to subsection (2), this Regulation is deemed to have come into force on September 30, 2008.

(2) Sections 1 and 3 come into force on the day this Regulation is filed.

 

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