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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 March 7, 2014 to the e-Laws currency date.

Last amendment: O. Reg. 52/14.

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

New Pension Plans

5.

Exclusion from the Guarantee Fund

6.

Restrictions re annuities and transfers on wind up

Amendments to the New Pension Plans

7.

Amendments re escalated adjustments and early retirement provisions

8.

Restrictions on increasing benefits

9.

Special early retirement window benefits

10.

Special plant closure benefit

12.

Special early retirement window benefit deficiency

12.1

Special payments for special early retirement window benefit deficiency, benefit offered on or after April 1, 2017

13.

Solvency liabilities

Election re Solvency Funding Relief from December 1, 2013 to March 31, 2024

14.

Opting out of solvency funding relief measures

Contributions and Other Payments — December 1, 2013 to October 1, 2017

15.

Aggregate contributions to the new pension plans

16.

Payments to the new pension plans from excess net cash

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

17.

Annual reports, new Wrap Plan

18.

Special payments for consolidated prior solvency deficiency, new Wrap Plan

19.

Other special payments

New Hourly Employees and Salaried Employees Plans: December 1, 2013 to March 31, 2024

20.

Annual reports, December 1, 2013 to March 31, 2017

21.

Annual reports, April 1, 2017 to March 31, 2024

22.

Special payments for consolidated prior solvency deficiency

23.

Adjustment re special payments

Interpretation

Interpretation

1. (1) In this Regulation,

“early retirement window” means a period,

(a) that begins on January 1, 2002 and ends on October 31, 2002,

(b) that begins on January 1, 2003 and ends on October 31, 2003, or

(c) that begins on January 1, 2004 and ends on July 31, 2004;

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

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

“new pension plans” means the new Hourly Employees Plan, the new Salaried Employees Plan and the new Wrap Plan;

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

“new Wrap Plan” means the Essar Steel Algoma Inc. Wrap Pension Plan registered under the Act as number 1079888;

“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. O. Reg. 202/02, s. 1 (1); O. Reg. 7/13, 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 new 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).

(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 new 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).

(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).

New Pension Plans

Exclusion from the Guarantee Fund

5. (1) Pension benefits provided by the new pension plans are not guaranteed by the Guarantee Fund. O. Reg. 202/02, s. 5 (1).

(2) The administrator of any of the new pension plans is not required to file a Pension Benefits Guarantee Fund assessment certificate, despite subsection 18 (7) of the General Regulation. O. Reg. 202/02, s. 5 (2).

(3) Essar Steel Algoma Inc. is not required to pay to the Guarantee Fund an annual assessment in respect of any of the new pension plans, despite subsection 37 (1) of the General Regulation. O. Reg. 202/02, s. 5 (3); O. Reg. 7/13, s. 2.

(4) Sections 30 and 37 of the General Regulation do not apply with respect to the new pension plans. O. Reg. 202/02, s. 5 (4).

(5) The filing of an election under section 14 of this Regulation does not affect the operation of this section. O. Reg. 327/13, 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 new pension plans. O. Reg. 202/02, s. 6.

Amendments to the New Pension Plans

Amendments re escalated adjustments and early retirement provisions

7. (1) The new Hourly Employees Plan or the new Salaried Employees Plan, as the case may be, is exempt from sections 14 and 26 of the Act with respect to an amendment described in subsection (2) if the amendment is filed with the Superintendent on or before September 1, 2002. O. Reg. 202/02, s. 7 (1).

(2) The exemption relates to an amendment of the escalated adjustment and early retirement provisions that is effective on September 17, 2001. O. Reg. 202/02, s. 7 (2).

Restrictions on increasing benefits

8. (1) Until the initial solvency deficiency and the special early retirement window benefit deficiency in the new Hourly Employees Plan or the new Salaried Employees Plan, as the case may be, are liquidated, the plan shall not be amended to increase pension benefits or ancillary benefits except as authorized by subsection (2) or (3). O. Reg. 202/02, s. 8 (1).

(2) Amendments to the pension benefits and ancillary benefits provided by the new Hourly Employees Plan may provide for,

(a) the special early retirement window benefits described in section 9;

(b) the special plant closure benefit described in section 10;

(c) escalated adjustments that are not in excess of the escalated adjustments under the original Hourly Employees Plan as they existed on September 16, 2001; and

(d) extension of the final average earnings formula for employment after July 31, 1999 under the original Hourly Employees Plan in effect on September 16, 2001 to some or all years of employment before July 31, 1999 of a member of the plan. O. Reg. 202/02, s. 8 (2).

(3) Amendments to the pension benefits and ancillary benefits provided by the new Salaried Employees Plan may provide for,

(a) the special early retirement window benefits described in section 9;

(b) the special plant closure benefit described in section 10; and

(c) escalated adjustments that are not in excess of the escalated adjustments under the original Salaried Employees Plan as they existed on September 16, 2001. O. Reg. 202/02, s. 8 (3).

Special early retirement window benefits

9. (1) The special early retirement window benefits provided by the new Hourly Employees Plan or by the new Salaried Employees Plan, as the case may be, are all the pension benefits and ancillary benefits to which members are entitled under the plan,

(a) if they elect early retirement under a temporary program offered for a period that falls within an early retirement window;

(b) if they elect early retirement under any other temporary program offered for a period within the window that begins on August 1, 2004 and ends on December 31, 2006, other than a program described in subsection (2); or

(c) if they elect early retirement under any other temporary program offered for a maximum period of 12 months that begins on or after January 1, 2007, other than a program described in subsection (2). O. Reg. 88/05, s. 1.

(2) The temporary program excluded from clause (1) (b) or (c) is a program that offers benefits in excess of the benefits that would have been available under the early retirement provisions of the original Hourly Employees Plan or the original Salaried Employees Plan, as the case may be, as those provisions read on September 16, 2001. O. Reg. 88/05, s. 1.

Special plant closure benefit

10. (1) The special plant closure benefit provided by the new Hourly Employees Plan is the plant closure benefit payable upon the wind up of the plan in whole or in part to or in respect of a person who, on September 16, 2001, was a member of the original Hourly Employees Plan. O. Reg. 202/02, s. 10 (1).

(2) The special plant closure benefit provided by the new Salaried Employees Plan is the plant closure benefit payable upon the wind up of the plan in whole or in part to or in respect of a person who, on September 16, 2001, was a member of the original Salaried Employees Plan. O. Reg. 202/02, s. 10 (2).

(3) Despite subsections (1) and (2), the special plant closure benefit does not include the amount of a plant closure benefit that is greater than the benefit payable under the provisions of the original Hourly Employees Plan or the original Salaried Employees Plan, as the case may be, as those provisions read on September 16, 2001. O. Reg. 202/02, s. 10 (3).

11. Revoked: O. Reg. 327/13, s. 4.

Special early retirement window benefit deficiency

12. (1) The special early retirement window benefit deficiency of the new Hourly Employees Plan or the new Salaried Employees Plan, as the case may be, is the amount described in subsection (2). O. Reg. 88/05, s. 2.

(2) The special early retirement window benefit deficiency for a temporary program described in section 9 is the amount by which “A” exceeds “B” where,

“A” is the portion of the solvency liabilities of the plan, as determined on the last day on which members may retire under the temporary program, that relates to the special early retirement window benefits to which members are entitled under the temporary program, and

“B” is the portion of the solvency liabilities of the plan, as determined on the last day on which members may retire under the temporary program, that relates to all the pension benefits and ancillary benefits to which those members would be entitled in the absence of the temporary program. O. Reg. 88/05, s. 2.

Special payments for special early retirement window benefit deficiency, benefit offered on or after April 1, 2017

12.1 (1) This section applies if, under a temporary program, an early retirement window benefit is offered to members of the new Hourly Employees Plan or the new Salaried Employees Plan for a period that begins on or after April 1, 2017. O. Reg. 327/13, s. 5.

(2) For the purposes of subsection 5 (1) of the General Regulation, special payments required to liquidate any special early retirement window benefit deficiency arising from the temporary program referred to in subsection (1), with interest at the rates used in the report under section 14 of the General Regulation in which the deficiency is determined, shall be made in equal monthly instalments over a period of five years beginning on the valuation date of the report in which the deficiency is determined. O. Reg. 327/13, s. 5.

Solvency liabilities

13. For the purposes of the definition of “solvency liabilities” in subsection 1 (2) of the General Regulation, the solvency liabilities of the new Hourly Employees Plan and the new Salaried Employees Plan also exclude liabilities for the special plant closure benefit described in section 10. O. Reg. 202/02, s. 13.

Election re Solvency Funding Relief from December 1, 2013 to March 31, 2024

Opting out of solvency funding relief measures

14. (1) The administrators of the new pension plans may jointly file an election with the Superintendent to permit all of the new pension plans to be governed by the General Regulation and by subsection (4), instead of being governed by sections 15 to 23 of this Regulation. O. Reg. 327/13, s. 6.

(2) The election must be filed before April 1, 2018 and it cannot be withdrawn. O. Reg. 327/13, s. 6.

(3) An election filed on or before March 31 in any year takes effect on March 31 of that year, and an election filed after March 31 in any year takes effect on March 31 of the following year. O. Reg. 327/13, s. 6.

(4) If an election is filed, the following rules apply to each of the new pension plans:

1. For the period of three months after the effective date of the election, Essar Steel Algoma Inc. shall make the contributions required under sections 15, 18, 19, 22 and 23.

2. Essar Steel Algoma Inc. shall pay the amount of excess net cash owing under section 16 to the new pension plans as of the effective date of the election. The amount must be paid in accordance with section 16.

3. Within three months after the effective date of the election, the administrator of each new pension plan shall file a valuation report, as of that effective date, determining the consolidated prior solvency deficiency of the plan as described in subsection (5).

4. The consolidated prior solvency deficiency of each of the new pension plans must be liquidated by equal monthly instalments over the period that begins on the valuation date of the report and ends on March 31, 2024.

5. The new pension plans are not entitled to the deferral authorized by subsection 5 (1.0.1) of the General Regulation in respect of special payments to liquidate the consolidated prior solvency deficiency. O. Reg. 327/13, s. 6.

(5) The consolidated prior solvency deficiency of a new pension plan, for the purposes of this section, is the present value, as of the effective date of the election, of all special payments that are required before the effective date and are scheduled to be paid on or after the effective date with respect to the following deficiencies:

1. Any solvency deficiency determined in a valuation report filed under section 3, 13 or 14 of the General Regulation on or after December 1, 2013 and before the effective date.

2. Any special early retirement window benefit deficiency determined in a valuation report filed under section 3, 13 or 14 of the General Regulation on or after December 1, 2013 and before the effective date. O. Reg. 327/13, s. 6.

(6) The consolidated prior solvency deficiency of a new pension plan must be determined without the use of 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. O. Reg. 327/13, s. 6.

14.1 Revoked: O. Reg. 327/13, s. 6.

Contributions and Other Payments — December 1, 2013 to October 1, 2017

Aggregate contributions to the new pension plans

15. (1) Essar Steel Algoma Inc. shall make the following contributions to the new pension plans for the period indicated, despite subsection 5 (1) of the General Regulation:

1. For the month of December 2013, $4.6 million.

2. For the year 2014, $55 million, payable in 12 equal monthly instalments.

3. For the year 2015, $55 million, payable in 12 equal monthly instalments.

4. For the year 2016, $60 million payable in 12 equal monthly instalments.

5. For each month in 2017 ending with the month in which the April 1, 2017 valuation report is filed for the new Hourly Employees Plan and for the new Salaried Employees Plan, $5 million. O. Reg. 327/13, s. 6.

(2) Payment of the contributions for a month is due on the last business day of the month. O. Reg. 327/13, s. 6.

(3) The contributions for a month shall be paid to the new pension plans in accordance with the following rules:

1. First, the normal costs that are payable in the month to the new Hourly Employees Plan and to the new Salaried Employees Plan must be paid in full.

2. Second, the amount that is the greater of “A” and “B” must be paid in full to the new Wrap Plan, where,

“A” is the amount of the special payments that are payable in the month to the new Wrap Plan, and

“B” is the total of all pension benefits and ancillary benefits that were payable for the preceding month to retired members and other persons entitled to benefits under the new Wrap Plan.

3. Third, the balance of the contributions for the month must be allocated between and paid to the new Hourly Employees Plan and the new Salaried Employees Plan using the formula,

C × D/E

in which,

“C” is the balance of the contributions for the month,

“D” is the solvency deficiency of the new Hourly Employees Plan or the new Salaried Employees Plan, as applicable, as determined in the most recently filed report under section 14 of the General Regulation, and

“E” is the sum of the solvency deficiencies of the new Hourly Employees Plan and the new Salaried Employees Plan as determined in the most recently filed report under section 14 of the General Regulation for each pension plan.

O. Reg. 327/13, s. 6.

Payments to the new pension plans from excess net cash

16. (1) This section applies if Essar Steel Algoma Inc. has excess net cash, as determined under subsection (6), for any fiscal year ending after December 1, 2013 and on or before March 31, 2017. O. Reg. 327/13, s. 6.

(2) However, this section does not apply for a fiscal year if the ratio of the solvency assets to the solvency liabilities at the end of the year for each of the new pension plans is 1.0 or higher. O. Reg. 327/13, s. 6.

(3) For each fiscal year in which Essar Steel Algoma Inc. has excess net cash, a payment equal to the lesser of the following amounts shall be made to the new pension plans within 90 days after the end of the fiscal year:

1. Twenty per cent of the excess net cash.

2. The sum of the solvency deficiencies and special early retirement window deficiencies in all of the new pension plans as determined in the most recently filed report under section 14 of the General Regulation for each plan, as adjusted under subsection (5). O. Reg. 327/13, s. 6.

(4) The payment for a fiscal year shall be allocated among the new pension plans, and the share of each new pension plan is calculated using the formula,

F × G/H

in which,

“F” is the payment to be made to all of the new pension plans under subsection (3),

“G” is the solvency deficiency of the new pension plan as determined in the most recently filed report under section 14 of the General Regulation for the pension plan, as adjusted under subsection (5), and

“H” is the sum of the solvency deficiencies of the new pension plans as determined in the most recently filed report under section 14 of the General Regulation for each pension plan, as adjusted under subsection (5).

O. Reg. 327/13, s. 6.

(5) Each solvency deficiency referred to in the definitions of “G” and “H” in subsection (4) must be adjusted by including the liabilities referred to in clauses (a) to (h) of the definition of “solvency liabilities” in subsection 1 (2) of the General Regulation. O. Reg. 327/13, s. 6.

(6) Essar Steel Algoma Inc.’s excess net cash for a fiscal year, for the purposes of this section, is the amount calculated using the formula,

L − M

in which,

“L” is the amount of cash generated by Essar Steel Algoma Inc.’s operating activities for the year in excess of $100 million after taking into account any deductions for interest, taxes, capital investment, working capital and financing fees, but excluding any loans made or obtained, and

“M” is the total amount of contributions payable to the new pension plans in the following fiscal year.

O. Reg. 52/14, s. 1.

(7) The excess net cash for a fiscal year is determined using information in Essar Steel Algoma Inc.’s most recent audited financial statements and in the most recently filed reports under section 14 of the General Regulation for each of the new pension plans. O. Reg. 327/13, s. 6.

(8) At the Superintendent’s request, the administrator of any of the new pension plans shall give the Superintendent such information and documents as the Superintendent may specify to enable the Superintendent to verify the amount of Essar Steel Algoma Inc.’s excess net cash for a fiscal year, as determined for the purposes of this section. O. Reg. 327/13, s. 6.

(9) A reference in this section to a fiscal year means a fiscal year of Essar Steel Algoma Inc. O. Reg. 327/13, s. 6.

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

Annual reports, new Wrap Plan

17. (1) The administrator of the new 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.

(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, new Wrap Plan

18. (1) For the purposes of this section, the consolidated prior solvency deficiency of the new 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.

(2) For the period beginning on December 1, 2013 and ending on March 31, 2024, a payment shall be made each month to the new 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) 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.

(3) The consolidated prior solvency deficiency of the new 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.

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

Other special payments

19. The special payments that, under subsection 5 (1) of the General Regulation, are required to be made to the new 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.

New Hourly Employees and Salaried Employees Plans: December 1, 2013 to March 31, 2024

Annual reports, December 1, 2013 to March 31, 2017

20. (1) A report required under section 14 of the General Regulation for the new Hourly Employees Plan and the new Salaried Employees Plan with a valuation date on or after December 1, 2013 and before April 1, 2017 shall also set out the following information:

1. Whether there is a special early retirement window benefit deficiency described in section 12 of this Regulation.

2. If there is such a deficiency, the amount of the deficiency and the special payments required to liquidate it in accordance with section 5 of the General Regulation. O. Reg. 327/13, s. 6.

(2) In determining the solvency deficiency in a report referred to in subsection (1), 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. O. Reg. 327/13, s. 6.

Annual reports, April 1, 2017 to March 31, 2024

21. (1) The administrator of the new Hourly Employees Plan and the new Salaried Employees Plan shall prepare a report under section 14 of the General Regulation with a valuation date of April 1, 2017, and shall file the report within six months after the valuation date. O. Reg. 327/13, s. 6.

(2) The administrator shall prepare a report under section 14 of the General Regulation with a valuation date of April 1 of each subsequent year, from 2018 to 2024, 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 must also contain the following information:

1. For a report with a valuation date of April 1, 2017, whether there is a consolidated prior solvency deficiency as described in subsection 22 (1) of this Regulation.

2. For a report with a valuation date of April 1, 2017, 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 22 (2) of this Regulation.

3. Whether there is a special early retirement window benefit deficiency described in section 12 of this Regulation.

4. If there is a special early retirement window benefit deficiency, the amount of the deficiency and the special payments required to liquidate it in accordance with section 5 of the General 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. 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).

2. 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 subsections 22 (2) and 23 (1) of this Regulation. O. Reg. 327/13, s. 6; O. Reg. 52/14, s. 3.

Special payments for consolidated prior solvency deficiency

22. (1) For the purposes of this section, the consolidated prior solvency deficiency of the new Hourly Employees Plan and the new Salaried Employees Plan, respectively, is the present value, as of the April 1, 2017 valuation date, of all special payments that are required with respect to any solvency deficiency and special early retirement window benefit deficiency determined in a report under section 3, 13 or 14 of the General Regulation filed before the April 1, 2017 report and that are scheduled to be paid after April 1, 2017, with interest at the rates described in subsection 5 (2) of the General Regulation. O. Reg. 327/13, s. 6.

(2) For the purposes of subsection 5 (1) of the General Regulation, special payments to liquidate the consolidated prior solvency deficiency of the new Hourly Employees Plan and the new Salaried Employees Plan, respectively, with interest at the rates described in subsection 5 (2) of the General Regulation, shall be made in equal monthly instalments over the period beginning on April 1, 2017 and ending on March 31, 2024. O. Reg. 327/13, s. 6.

(3) The consolidated prior solvency deficiency of the new Hourly Employees Plan and the new Salaried Employees Plan, respectively, 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.

(4) Subsection 5 (1.0.1) of the General Regulation does not apply to the new Hourly Employees Plan or the new Salaried Employees Plan, as the case may be, in respect of the special payments described in subsection (2) of this section. O. Reg. 327/13, s. 6.

Adjustment re special payments

23. (1) On or before October 31, 2017, Essar Steel Algoma Inc. shall make a payment to the new Hourly Employees Plan and the new Salaried Employees Plan, respectively, in the amount by which “J” exceeds “K” — including interest on that amount at the rates described in subsection 5 (2) of the General Regulation — where,

“J” is the sum of the monthly special payments required to be paid, under a valuation report with a valuation date of April 1, 2017, for the period commencing on April 1, 2017 and ending on the earlier of October 31, 2017 and the date on which the valuation report referred to in subsection 21 (1) of this Regulation for the pension plan is filed, and

“K” is the amount of the contribution made under paragraph 5 of subsection 15 (1) of this Regulation to the pension plan less the sum of the normal costs paid to the pension plan on or after April 1, 2017 and on or before October 31, 2017.

O. Reg. 327/13, s. 6.

(2) Subsection (1) does not apply if an election with an effective date of March 31, 2017 or earlier is filed under section 14 of this Regulation. O. Reg. 327/13, s. 6.