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Pension Benefits Act
Loi sur les régimes de retraite

ONTARIO REGULATION 202/02

Essar Steel Algoma Inc. pension plans

Consolidation Period: From November 30, 2018 to the e-Laws currency date.

Last amendment: 485/18.

Legislative History: 88/05, 7/13, 327/13, 52/14, 254/18, 485/18.

This Regulation is made in English only.

CONTENTS

Interpretation

1.

Interpretation

Original Pension Plans

2.

Exemptions re winding up

3.

Payments on winding up

4.

Duties of administrator re winding up

Wrap Plan

5.

Exclusion from the Guarantee Fund

6.

Restrictions re annuities and transfers on wind up

Wrap Plan: December 1, 2013 to December 31, 2024

17.

Annual reports, Wrap Plan

18.

Special payments for consolidated prior solvency deficiency, Wrap Plan

19.

Other special payments

 

Interpretation

Interpretation

1. (1) In this Regulation,

“General Regulation” means Regulation 909 of the Revised Regulations of Ontario, 1990 (“General”) made under the Act;

“Hourly Employees Plan” means The Essar Steel Algoma Inc. Pension Plan for Hourly Employees registered under the Act as number 1079904;

“original Hourly Employees Plan” means The Non-Contributory Pension Plan Covering Hourly Paid Bargaining Unit Employees of Algoma Steel Inc. registered under the Act as number 335802;

“original Salaried Employees Plan” means The Algoma Steel Inc. Salaried Employees Pension Plan for Employees in Canada registered under the Act as number 335810;

“Salaried Employees Plan” means The Essar Steel Algoma Inc. Pension Plan for Salaried Employees registered under the Act as number 1079896;

“Wrap Plan” means the Essar Steel Algoma Inc. Wrap Pension Plan registered under the Act as number 1079888. O. Reg. 485/18, s. 1.

(2) Expressions in this Regulation have the same meaning as in the General Regulation, except where otherwise indicated.  O. Reg. 202/02, s. 1 (2).

Original Pension Plans

Exemptions re winding up

2. The following provisions do not apply with respect to the original Hourly Employees Plan or the original Salaried Employees Plan:

1. Subsections 68 (2) and (5) of the Act.

2. Section 75 of the Act.

3. Subsections 81 (1), (2), (3), (5) and (8) of the Act.

4. Section 86 of the Act.

5. Subsections 34 (5), (6) and (7) of the General Regulation.  O. Reg. 202/02, s. 2.

Payments on winding up

3. (1) Where an order has been made under subsection 83 (1) of the Act in respect of the original Hourly Employees Plan, the administrator shall pay to each person who is entitled on wind up to payment of benefits guaranteed by the Guarantee Fund or other amounts guaranteed by the Guarantee Fund an amount equal to the sum of,

(a) 100 per cent of the benefits and other amounts for the person included in the calculation of the Guaranteed Benefit liability; and

(b) the amount determined under subsection (2) related to all other benefits for the person included in the calculation of the Ontario wind up liability.  O. Reg. 202/02, s. 3 (1).

(2) The amount referred to in clause (1) (b) is determined as follows:

1. Calculate the ratio of the Ontario assets of the plan to its modified Ontario wind up liability as of September 17, 2001 but before any transfer of assets to the Hourly Employees Plan.

2. Multiply the ratio by the value of 100 per cent of the benefits in respect of the person, included in the calculation of the modified Ontario wind up liability but not included in the calculation of the Guaranteed Benefit liability in respect of the person.  O. Reg. 202/02, s. 3 (2); O. Reg. 485/18, s. 2 (1).

(3) Where an order has been made under subsection 83 (1) of the Act in respect of the original Salaried Employees Plan, the administrator shall pay to each person who is entitled on wind up to payment of benefits guaranteed by the Guarantee Fund or other amounts guaranteed by the Guarantee Fund an amount equal to the sum of,

(a) 100 per cent of the benefits and other amounts for the person included in the calculation of the Guaranteed Benefit liability; and

(b) the amount determined under subsection (4) related to all other benefits for the person included in the calculation of the Ontario wind up liability.  O. Reg. 202/02, s. 3 (3).

(4) The amount referred to in clause (3) (b) is determined as follows:

1. Calculate the ratio of the Ontario assets of the plan to its modified Ontario wind up liability as of September 17, 2001 but before any transfer of assets to the Salaried Employees Plan.

2. Multiply the ratio by the value of 100 per cent of the benefits in respect of the person, included in the calculation of the modified Ontario wind up liability but not included in the calculation of the Guaranteed Benefit liability in respect of the person.  O. Reg. 202/02, s. 3 (4); O. Reg. 485/18, s. 2 (2).

(5) On application by the administrator, the Superintendent may, from time to time, allocate from the Guarantee Fund and pay to the original Hourly Employees Plan or the original Salaried Employees Plan, as the case may be, sufficient money to provide, together with the Ontario assets, for the continued payment of benefits determined under this section and under section 34 of the General Regulation.  O. Reg. 202/02, s. 3 (5).

(6) In this section,

“Guaranteed Benefit liability” has the same meaning as in subsection 34 (5) of the General Regulation;

“modified Ontario wind up liability” has the same meaning as in subsection 34 (6) of the General Regulation.  O. Reg. 202/02, s. 3 (6); O. Reg. 327/13, s. 2.

Duties of administrator re winding up

4. (1) This section applies in the event of the wind up of the original Hourly Employees Plan or the original Salaried Employees Plan.  O. Reg. 202/02, s. 4 (1).

(2) The administrator of the applicable pension plan shall not purchase an annuity from an insurance company in satisfaction of the obligation under the plan to provide a pension unless the market value of the assets of the plan is at least equal to the premium required to be paid to the insurance company to purchase the annuity.  O. Reg. 202/02, s. 4 (2).

(3) The administrator of the applicable pension plan shall give the Minister of Finance a copy of any report that the administrator is required to file with the Superintendent.  O. Reg. 202/02, s. 4 (3).

Wrap Plan

Exclusion from the Guarantee Fund

5. (1) Pension benefits provided by the Wrap Plan are not guaranteed by the Guarantee Fund. O. Reg. 485/18, s. 3.

(2) The administrator of the Wrap Plan is not required to file a Pension Benefits Guarantee Fund assessment certificate, despite subsection 18 (7) of the General Regulation. O. Reg. 485/18, s. 3.

(3) Essar Steel Algoma Inc. is not required to pay to the Guarantee Fund an annual assessment in respect of the Wrap Plan, despite subsection 37 (1) of the General Regulation. O. Reg. 485/18, s. 3.

(4) Sections 30 and 37 of the General Regulation do not apply with respect to the Wrap Plan. O. Reg. 485/18, s. 3.

(5) The filing of an election under section 14 of this Regulation, as it read immediately before it was revoked by Ontario Regulation 485/18 made under this Act, does not affect the operation of this section. O. Reg. 485/18, s. 3.

Restrictions re annuities and transfers on wind up

6. Subsection 29 (8) of the General Regulation does not apply with respect to the Wrap Plan. O. Reg. 485/18, s. 3.

7.-16. Revoked: O. Reg. 485/18, s. 4.

Wrap Plan: December 1, 2013 to December 31, 2024

Annual reports, Wrap Plan

17. (1) The administrator of the Wrap Plan shall prepare a report under section 14 of the General Regulation with a valuation date of December 1, 2013, and shall file the report within six months after the valuation date. O. Reg. 327/13, s. 6; O. Reg. 485/18, s. 5.

(2) The administrator shall prepare a report under section 14 of the General Regulation for each subsequent year from 2014 to 2024, covering a period not greater than 12 months, and shall file the report within six months after the applicable valuation date. O. Reg. 327/13, s. 6.

(3) The report under section 14 of the General Regulation with a valuation date of December 1, 2013 must also contain the following information:

1. Whether there is a consolidated prior solvency deficiency as described in subsection 18 (1) of this Regulation.

2. If there is a consolidated prior solvency deficiency, the amount of the deficiency, the special payments that would be required to liquidate it in accordance with section 5 of the General Regulation and the special payments that are required to liquidate it in accordance with subsection 18 (2) of this Regulation. O. Reg. 327/13, s. 6.

(4) The following requirements apply for the preparation of the report under section 14 of the General Regulation:

1. In determining the solvency deficiency in the report with a valuation date of December 1, 2013, it is not permitted to use an averaging method that stabilizes short-term fluctuations in the market value of the plan assets in the calculation of a “solvency asset adjustment” as defined in subsection 1 (2) of the General Regulation.

2. Subsection 5 (17) of the General Regulation does not apply to the valuation of the consolidated prior solvency deficiency unless the application of that subsection is required to avoid revocation of registration of the pension plan under the Income Tax Act (Canada).

3. For the purposes of the definition of “solvency asset adjustment” in subsection 1 (2) of the General Regulation, the solvency asset adjustment also includes the present value of the special payments described in paragraph 1 of subsection 18 (2) and section 19 of this Regulation. O. Reg. 327/13, s. 6; O. Reg. 52/14, s. 2.

Special payments for consolidated prior solvency deficiency, Wrap Plan

18. (1) For the purposes of this section, the consolidated prior solvency deficiency of the Wrap Plan is the present value, as of the December 1, 2013 valuation date, of all special payments that are required with respect to any solvency deficiency determined in a report under section 3, 13 or 14 of the General Regulation with a valuation date earlier than December 1, 2013 and that are scheduled to be paid after December 1, 2013. O. Reg. 327/13, s. 6; O. Reg. 485/18, s. 5.

(2) For the period beginning on December 1, 2013 and ending on March 31, 2024, a payment shall be made each month to the Wrap Plan in the greater of the amounts determined under the following paragraphs:

1. The special payment for the month that, under subsection 5 (1) or (1.0.0.1) of the General Regulation, is required to liquidate the consolidated prior solvency deficiency of the pension plan, with interest at the rates described in subsection 5 (2) of the General Regulation, by equal monthly instalments over the period beginning on December 1, 2013 and ending on March 31, 2024.

2. The total of all pension benefits and ancillary benefits payable to retired members and other persons entitled to benefits under the pension plan for the month preceding the month in which the payment under this subsection is due. O. Reg. 327/13, s. 6; O. Reg. 254/18, s. 2; O. Reg. 485/18, s. 5.

(3) The consolidated prior solvency deficiency of the Wrap Plan is excluded, for the purposes of subsection 5 (1) of the General Regulation, from the solvency deficiency described in clause 5 (1) (e) of the General Regulation. O. Reg. 327/13, s. 6; O. Reg. 485/18, s. 5.

(4) Subsection 5 (1.0.1) of the General Regulation does not apply to the Wrap Plan in respect of a special payment described in paragraph 1 of subsection (2) of this section. O. Reg. 327/13, s. 6; O. Reg. 485/18, s. 5.

Other special payments

19. The special payments that, under subsection 5 (1) or (1.0.0.1) of the General Regulation, are required to be made to the Wrap Plan include special payments in respect of a solvency deficiency disclosed in a report filed under subsection 17 (2) of this Regulation on or after December 1, 2013 and on or before March 31, 2017, with interest at the rates described in subsection 5 (2) of the General Regulation, payable by equal monthly instalments over the period beginning on April 1, 2017 and ending on March 31, 2024. O. Reg. 327/13, s. 6; O. Reg. 254/18, s. 3; O. Reg. 485/18, s. 5.

20.-23. Revoked: O. Reg. 485/18, s. 6.