O. Reg. 250/18: GENERAL

filed April 20, 2018 under Pension Benefits Act, R.S.O. 1990, c. P.8

ontario regulation 250/18

made under the

Pension Benefits Act

Made: April 18, 2018
Filed: April 20, 2018
Published on e-Laws: April 20, 2018
Printed in The Ontario Gazette: May 5, 2018

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

(GENERAL)

1. The French version of Regulation 909 of the Revised Regulations of Ontario, 1990 is amended by striking out “solde créditeur de l’exercice antérieur” wherever it appears and substituting in each case “solde créditeur de l’année antérieure”.

2. (1) The definition of “going concern assets” in subsection 1 (2) of the Regulation is amended by striking out “and” at the end of clause (a), by revoking clause (b) and by substituting the following:

(b) if the report has a valuation date before December 31, 2017 or is in respect of a jointly sponsored pension plan listed in subsection 1.3.1 (3), the present value of any special payments in respect of a going concern unfunded liability disclosed in previously filed reports, and

(c) if the report has a valuation date on or after December 31, 2017 and is not in respect of a jointly sponsored pension plan listed in subsection 1.3.1 (3),

(i) the present value of special payments in respect of any past service unfunded actuarial liability, other than special payments required to liquidate any past service unfunded liability determined in the report,

(ii) the present value of special payments described in clause 5 (1.0.0.1) (e) in respect of any plan amendment that increases going concern liabilities, and

(iii) the present value of special payments in respect of a going concern unfunded liability that are scheduled for payment within one year after the valuation date of the report and that are disclosed in the previously filed report, excluding any special payments described in subclause (i);

(2) Subsection 1 (2) of the Regulation is amended by adding the following definitions:

“going concern excess” means, in respect of a pension plan, the amount, if any, by which the going concern assets of the pension plan exceed the sum of,

(a) the going concern liabilities of the pension plan,

(b) the amount equal to the provision for adverse deviations in respect of the going concern liabilities of the pension plan, and

“going concern funded ratio” means, in relation to a pension plan, the ratio of “Y” to “Z” where,

“Y” is the amount by which the value of the assets of the pension plan determined on the basis of a going concern valuation, including accrued and receivable income but excluding the amount of any letter of credit held in trust for the pension plan, exceeds the prior year credit balance, and

“Z” is the total amount of the going concern liabilities of the pension plan; (“ratio de capitalisation à long terme”)

(3) The definition of “going concern unfunded liability” in subsection 1 (2) of the Regulation is revoked and the following substituted:

“going concern unfunded liability” means,

(a) for a report with a valuation date before December 31, 2017 or that is in respect of a jointly sponsored pension plan listed in subsection 1.3.1 (3), the amount, if any, by which the sum of the going concern liabilities and the prior year credit balance exceeds the going concern assets, and

(b) for a report with a valuation date on or after December 31, 2017, other than a report in respect of a jointly sponsored pension plan listed in subsection 1.3.1 (3), the amount, if any, by which the sum of the going concern liabilities, the amount equal to the provision for adverse deviations in respect of going concern liabilities and the prior year credit balance exceeds the going concern assets; (“passif à long terme non capitalisé”)

(4) The definition of “past service unfunded actuarial liability” in subsection 1 (2) of the Regulation is revoked and the following substituted:

“past service unfunded actuarial liability” means,

(a) the amount of going concern unfunded liability that arose on a valuation date before December 31, 2017 resulting from the provision of benefits with respect to employment prior to the effective date of the pension plan or from an amendment to a pension plan that provides benefits for employment prior to the date of the amendment where the employment had not previously been recognized for the purposes of the provision of pension benefits, or

(b) the amount of going concern unfunded liability that arose on a valuation date on or after December 31, 2017 resulting from the provision of benefits with respect to employment prior to the effective date of the pension plan; (“passif actuariel pour services antérieurs non capitalisé”)

(5) Subsection 1 (2) of the Regulation is amended by adding the following definitions:

“provision for adverse deviations” means the percentage determined under section 11.2 to be the provision for adverse deviations; (“provision pour écarts défavorables”)

. . . . .

“reduced solvency deficiency”, in relation to a report, means the amount determined in accordance with section 1.3.2 for a pension plan that provides defined benefits; (“déficit de solvabilité réduit”)

(6) The definition of “solvency liabilities” in subsection 1 (2) of the Regulation is amended by striking out “clause 14 (8) (c)” in the portion before clause (a) and substituting “clauses 14 (8) (c) and 14 (8.0.4) (f)”.

(7) Subsection 1 (2) of the Regulation is amended by adding the following definition:

“solvency ratio” means, in relation to a pension plan, the ratio of “Y” to “Z” where,

“Y” is the amount by which the sum of the total amount of the solvency assets of the pension plan related to defined benefits and ancillary benefits plus the total amount of any letters of credit held in trust for the pension plan exceeds the prior year credit balance, and

“Z” is the total amount of the solvency liabilities related to defined benefits and ancillary benefits of the pension plan; (“ratio de solvabilité”)

(8) Subclause (a) (ii) of the definition of “transfer ratio” in subsection 1 (2) of the Regulation is revoked and the following substituted:

(ii) the sum of,

(A) if the report has a valuation date before December 31, 2017 or is in respect of a jointly sponsored pension plan listed in subsection 1.3.1 (3),

(1) the amount by which the sum of the estimates of normal cost given under clauses 14 (7) (a) and (b) in the report exceeds the sum of the estimates given under clause 14 (7) (c) in the report for the periods in respect of which the estimates under clauses 14 (7) (a) and (b) are given, and

(2) the sum of the special payments required to be made under this Regulation during the periods in respect of which the estimates under clauses 14 (7) (a) and (b) are given;

(B) if the report has a valuation date on or after December 31, 2017 and is not in respect of a jointly sponsored pension plan listed in subsection 1.3.1 (3),

(1) the amount by which the sum of the estimates of normal cost given under clauses 14 (8.0.2) (a) and (b) and the estimates of the amount equal to the provision for adverse deviations in respect of the normal cost given under subclause 14 (8.0.2) (c) (ii) in the report exceeds the sum of the estimates given under clause 14 (8.0.2) (d) in the report for the periods in respect of which the estimates under clauses 14 (8.0.2) (a) and (b) and subclause 14 (8.0.2) (c) (ii) are given, and

(2) the sum of the special payments required to be made under this Regulation during the periods in respect of which the estimates under clauses 14 (8.0.2) (a) and (b) and subclause 14 (8.0.2) (c) (ii) are given,

(9) Subsection 1 (4) of the Regulation is amended by striking out “or a transfer ratio”.

(10) Subsection 1 (5) of the Regulation is amended by striking out “a past service unfunded liability, a solvency deficiency, a solvency liability” and substituting “a past service unfunded actuarial liability, a solvency deficiency, a reduced solvency deficiency, a solvency liability”.

3. Section 1.1 of the Regulation is revoked.

4. (1) Clause 1.2 (1) (c) of the Regulation is amended by adding “actuarial” before “liability”.

(2) Subsection 1.2 (1) of the Regulation is amended by,

(a) striking out “the present value” at the beginning of clause (d) and substituting “if the report has a valuation date before December 31, 2017 or is in respect of a jointly sponsored pension plan listed in subsection 1.3.1 (3), the present value”;

(b) striking out “and” at the end of subclause (d) (iii) and adding the following clause:

(d.1) if the report has a valuation date on or after December 31, 2017 and is not in respect of a jointly sponsored pension plan listed in subsection 1.3.1 (3),

(i) the present value of all special payments referred to in clauses 5 (1.0.0.1) (a), (b) and (e) that are scheduled for payment within a period that begins on the valuation date of a report and continues until the end of a five-year period that begins on a date not later than 12 months after the valuation date, and

(ii) the present value of all special payments referred to in clauses 5 (1.0.0.1) (f), (g), (h) and (i), other than special payments required to liquidate any reduced solvency deficiency determined in the report; and

(3) The definitions of “D” and “E” in subsection 1.2 (2) of the Regulation are revoked and the following substituted:

“D” is the amount described in subsection (2.1), and

“E” is the amount described in subsection (2.2), and

(4) Section 1.2 of the Regulation is amended by adding the following subsections:

(2.1) In the formula in subsection (2), “D” is,

(a) for a report with a valuation date before December 31, 2017 or that is in respect of a jointly sponsored pension plan listed in subsection 1.3.1 (3), the present value of any special payments referred to in clause 5 (1) (e) that are scheduled for payment within the applicable period described in the definition of “C” in subsection (2), other than any special payments required to liquidate any solvency deficiency determined in the report; and

(b) for a report with a valuation date on or after December 31, 2017, other than a report in respect of a jointly sponsored pension plan listed in subsection 1.3.1 (3), the present value of any special payments referred to in clauses 5 (1.0.0.1) (f), (g), (h) and (i), other than any special payments required to liquidate any reduced solvency deficiency determined in the report.

(2.2) In the formula in subsection (2), “E” is,

(a) for a report with a valuation date before December 31, 2017 or in respect of a jointly sponsored pension plan listed in subsection 1.3.1 (3), the present value of the normal cost, which is determined using a benefit allocation method, for the applicable period described in the definition of “C” in subsection (2); and

(b) for a report with a valuation date on or after December 31, 2017, other than a report in respect of a jointly sponsored pension plan listed in subsection 1.3.1 (3), the present value of the normal cost and the amount equal to the provision for adverse deviations in respect of the normal cost, determined using a benefit allocation method, for the applicable period described in the definition of “C” in subsection (2).

(5) Subsection 1.2 (3) of the Regulation is amended by striking out “For the purposes of subsections (1) and (2), the present value” at the beginning of the portion before clause (a) and substituting “For the purposes of subsections (1) and (2), for a report with a valuation date before December 31, 2017 or in respect of a jointly sponsored pension plan listed in subsection 1.3.1 (3), the present value”.

(6) Section 1.2 of the Regulation is amended by adding the following subsection:

(3.1) For the purposes of subsections (1) and (2), for a report with a valuation date on or after December 31, 2017, other than a report in respect of a jointly sponsored pension plan listed in subsection 1.3.1 (3), the present value of special payments, required contributions, the normal cost and the provision for adverse deviations in respect of the normal cost must be calculated as of the valuation date of the report using,

(a) the interest rates that were used in the report to calculate the solvency liabilities, if the solvency liability adjustment is zero; or

(b) the average interest rates that were used in the report to calculate the solvency liability adjustment, if the solvency liability adjustment is not zero.

5. Subsection 1.3.1 (3) of the Regulation is amended by adding the following paragraph:

8. OMERS Supplemental Pension Plan for Police, Firefighters and Paramedics, registered under the Act as number 1175892.

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

1.3.2 (1) For the purposes of this Part, the reduced solvency deficiency, in relation to a report, of a pension plan that provides defined benefits is the amount determined in accordance with this section.

(2) The amount of the reduced solvency deficiency of a pension plan, as of a particular valuation date, is the amount by which “A” exceeds “B” where,

“A” is the sum of,

(a) 85 per cent of the pension plan’s solvency liabilities,

(b) 85 per cent of the pension plan’s solvency liability adjustment, and

“B” is the sum of the pension plan’s solvency assets and the solvency asset adjustment as of the valuation date.

7. Subsection 3 (1) of the Regulation is revoked and the following substituted:

(1) Where an amendment to a pension plan reduces or increases contributions or creates or changes a going concern unfunded liability or solvency deficiency, the administrator shall file a report containing,

(a) the plan’s going concern funded ratio on the date the amendment is effective;

(b) a description of any lump sum contribution that was made to fund any increase in going concern liabilities or solvency liabilities, or both, due to the amendment; and

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

3.0.1 (1) For the purposes of clause 14.0.1 (1) (b) of the Act,

(a) the prescribed level of the solvency ratio is 80 per cent; and

(b) the prescribed level of the going concern funded ratio is 80 per cent.

(2) Despite subsection (1), in the case of an amendment to a pension plan in respect of which a contribution is made to the pension fund that is at least equal to the greater of the increase in going concern liabilities and the increase in solvency liabilities resulting from the amendment, for the purposes of clause 14.0.1 (1) (b) of the Act,

(a) the prescribed level of the solvency ratio is the level that is at least equal to the plan’s solvency ratio if no such amendment were made; and

(b) the prescribed level of the going concern funded ratio is the level that is at least equal to the plan’s going concern funded ratio if no such amendment were made.

(3) The contribution referred to in subsection (2) is in addition to any contribution otherwise required under the Act.

(4) Subsections (1) and (2) do not apply to an amendment to a pension plan if,

(a) the amendment is filed before May 1, 2018; or

(b) the amendment implements a benefit improvement agreed to in a collective agreement before May 1, 2018 if the collective agreement is in place immediately before that date.

(5) Subsections (1) and (2) do not apply to a jointly sponsored pension plan listed in subsection 1.3.1 (3).

9. (1) Section 4 of the Regulation is amended by adding the following subsection:

(0.1) In this section,

“consolidated prior solvency deficiency” has the same meaning as in section 5.5.3.

(2) Section 4 of the Regulation is amended by adding the following subsections:

(1.1) Every pension plan shall also set out the obligation of the employer or any person or entity required to make contributions on behalf of the employer and, in the case of a jointly sponsored pension plan, the obligation of the members of the pension plan, if applicable, to contribute in respect of,

(a) the provision for adverse deviations in respect of the normal cost;

(b) any plan amendment that increases going concern liabilities; and

(1.2) Clause (1.1) (c) does not apply to a jointly sponsored pension plan listed in subsection 1.3.1 (3).

(1.3) Any plan amendments that are required for the purpose of complying with subsection (1.1) shall be made within 12 months after the date the first report for the pension plan with a valuation date on or after December 31, 2017 is filed under section 3, 13 or 14.

(3) Subsection 4 (2) of the Regulation is amended by striking out “subsection (2.1)” in the portion before clause (a) and substituting “subsections (2.1) and (2.1.1)”.

(4) Clause 4 (2) (a) of the Regulation is amended by striking out “all contributions” at the beginning and substituting “in the case of a report with a valuation date before December 31, 2017, all contributions”.

(5) Subsection 4 (2) of the Regulation is amended by adding the following clauses:

(a.1) as of the date the first report with a valuation date on or after December 31, 2017 is filed under section 3, 13 or 14, all contributions, including contributions for the provision for adverse deviations in respect of the normal cost, any going concern unfunded liability, solvency deficiency and reduced solvency deficiency, and money withheld by payroll deduction or otherwise from an employee, that are received from employees as the employees’ contributions to the pension plan;

. . . . .

(b.1) as of the date the first report with a valuation date on or after December 31, 2017 is filed under section 3, 13 or 14, all contributions required to pay the amount equal to the provision for adverse deviations in respect of the normal cost determined in accordance with section 11.1;

(6) Section 4 of the Regulation is amended by adding the following subsections:

(2.1.1) If the payments required under subsection (2) are greater than they would have been under that subsection as it read immediately before May 1, 2018, an employer who is required to make contributions under a pension plan, or if a person or entity is required to make contributions under the pension plan on behalf of the employer, that person or entity, and, if applicable, the members of the pension plan or their representative, shall make payments to the pension fund or to an insurance company, as applicable, that are not less than the amount calculated using the formula,

A − [(A−B) × C]

in which,

“A” is the total of the payments required under subsection (2) for the year based on the most recently filed report,

“B” is the total of the payments that would have been required under subsection (2) as it read immediately before May 1, 2018,

“C” is the value described in subsection (2.1.2).

(2.1.2) The value of “C” in the formula in subsection (2.1.1) is the value determined in accordance with the following:

1. For a pension plan that provides defined benefits where the obligation of the employer to contribute to the pension fund is limited to a fixed amount set out in a collective agreement that exists on May 1, 2018:

i. The value of “C” is equal to one in the year that is the earlier of,

A. 2021, and

B. the year in which the collective agreement expires.

ii. In any year prior to the year described in subparagraph i, the value of “C” is equal to one.

iii. In the year immediately following the year described in subparagraph i, the value of “C” is equal to one.

iv. In the year immediately following the year described in subparagraph iii, the value of “C” is equal to 0.667.

v. In the year immediately following the year described in subparagraph iv, the value of “C” is equal to 0.333.

vi. In any year following the year described in subparagraph v, the value of “C” is zero.

2. For any other pension plan:

i. In the first year following the valuation date of the first report filed with a valuation date that is on or after December 31, 2017, the value of “C” is equal to one.

ii. In the year immediately following the year described in subparagraph i, the value of “C” is equal to 0.667.

iii. In the year immediately following the year described in subparagraph ii, the value of “C” is equal to 0.333.

iv. In any year following the year described in subparagraph iii, the value of “C” is zero.

(7) Paragraph 1.2 of subsection 4 (2.3) of the Regulation is amended by striking out “14, the amount” and substituting “14 that is before December 31, 2017, the amount”.

(8) Subsection 4 (2.3) of the Regulation is amended by adding the following paragraphs:

1.2.1 If, at the valuation date of a report filed under section 3, 13 or 14 with a valuation date that is on or after December 31, 2017, the amount determined under clause (a) of the definition of “going concern assets” in subsection 1 (2) is not less than the sum of going concern liabilities determined using a benefit allocation method and the amount equal to the provision for adverse deviations in respect of going concern liabilities determined using the benefit allocation method, the present value of the required contributions for the five-year period referred to in paragraph 1.3 must not be less than the sum of the following, subject to paragraph 1.2.2:

i. The present value of the contributions for that period that would be made for the normal cost for the plan.

ii. The amount equal to the provision for adverse deviations in respect of the normal cost.

1.2.2 The amounts mentioned in subparagraphs 1.2.1 i and ii shall be determined using the benefit allocation method after the application of any available actuarial surplus to reduce the normal cost and the provision for adverse deviations in respect of the normal cost in accordance with subsection 7.0.3 (1) or, if the pension plan is a jointly sponsored pension plan listed in subsection 1.3.1 (3), after the application of any actuarial gains to reduce the normal cost in accordance with subsection 7 (3).

(9) Paragraph 1.3 of subsection 4 (2.3) of the Regulation is amended by adding “or 1.2.1” after “1.2” in the portion before subparagraph i.

(10) Paragraph 2 of subsection 4 (2.3) of the Regulation is amended by adding “with a valuation date before December 31, 2017 or in respect of a plan that is a jointly sponsored pension plan listed in subsection 1.3.1 (3)” after “14”.

(11) Subsection 4 (2.3) of the Regulation is amended by adding the following paragraph:

2.0.1 If, at the valuation date of a report filed under section 3, 13 or 14 with a valuation date that is on or after December 31, 2017 in respect of a plan that is not a jointly sponsored pension plan listed in subsection 1.3.1 (3), the amount determined under clause (a) of the definition of “going concern assets” in subsection 1 (2) is less than the sum of going concern liabilities determined using a benefit allocation method and the amount equal to the provision for adverse deviations in respect of going concern liabilities determined using the benefit allocation method, the present value of the required contributions, as determined under the actuarial cost method used by the plan, must not be less than the sum of the following, determined using the benefit allocation method:

i. The present value of the normal cost.

ii. The present value of the amount equal to the provision for adverse deviations in respect of the normal cost.

iii. The present value of the special payments determined in accordance with section 5 that would be required,

A. in respect of any plan amendment that increases going concern liabilities, or

B. to liquidate a going concern unfunded liability.

(12) Paragraphs 2.1, 3 and 3.1 of subsection 4 (2.3) of the Regulation are amended by striking out “paragraphs 1.2 and 2” wherever it appears and substituting in each case “paragraphs 1.2, 1.2.1, 2 and 2.0.1”.

(13) Subsection 4 (2.3) of the Regulation is amended by adding the following paragraphs:

4.0.1 In the case of a pension plan that is not a jointly sponsored pension plan, the present values referred to in paragraph 2.0.1 shall be calculated using whichever of the following periods is longest:

i. The period that begins on the valuation date referred to in paragraph 2.0.1 and continues until the end of the remaining amortization period of the going concern unfunded liability.

ii. The period that begins on the valuation date referred to in paragraph 2.0.1 and continues until the end of the amortization period in respect of any plan amendment that increases the going concern liabilities that has the longest remaining amortization period.

iii. The period of five years that begins on the valuation date referred to in paragraph 2.0.1.

. . . . .

4.2 In the case of a jointly sponsored pension plan to which paragraph 2.0.1 applies, the present values referred to in paragraph 2.0.1 shall be calculated using whichever of the following periods is longest:

i. The period that begins on a date that is not later than 12 months after the valuation date referred to in paragraph 2.0.1 and continues until the end of the remaining amortization period of the going concern unfunded liability.

ii. The period that begins on a date that is not later than 12 months after the valuation date referred to in paragraph 2.0.1 and continues until the end of the amortization period in respect of any plan amendment that increases going concern liabilities that has the longest remaining amortization period.

iii. The period of five years that begins on a date that is not later than 12 months after the valuation date referred to in paragraph 2.0.1.

(14) Subparagraph 5 ii of subsection 4 (2.3) of the Regulation is amended by striking out “paragraph 1.2” and substituting “paragraphs 1.2 and 1.2.1”.

(15) Subparagraph 5 iii of subsection 4 (2.3) of the Regulation is revoked and the following substituted:

iii. the present values referred to in paragraphs 2 and 2.0.1 shall be calculated based on the period used for the purpose of paragraph 4.1 or 4.2, as the case may be, and the sum of the projected pensionable earnings for each year in the applicable period, and

(16) Subparagraph 7 ii of subsection 4 (2.3) of the Regulation is revoked and the following substituted:

ii. the present value of the required contributions using the increased rates is not less than,

A. the present value of the contributions that would be made for the normal cost for the plan if the benefit allocation method were used, after the application of any actuarial gains to reduce the normal cost in accordance with subsection 7 (3), if paragraph 1.2 applies,

B. if the report has a valuation date on or after December 31, 2017, the sum of the present value of the contributions that would be made in respect of the normal cost for the plan and the provision for adverse deviations in respect of the normal cost for the plan if the benefit allocation method were used, after the application of any available actuarial surplus to reduce the normal cost or the amount equal to the provision for adverse deviations in respect of the normal cost in accordance with subsection 7.0.3 (1) or, if the pension plan is a jointly sponsored pension plan listed in subsection 1.3.1 (3), after the application of any actuarial gains to reduce the normal cost in accordance with subsection 7 (3), if paragraph 1.2.1 applies,

C. the sum of the present value of the normal cost and the present value of the special payments determined in accordance with section 5 that would be required to liquidate any going concern unfunded liability determined using the benefit allocation method, if paragraph 2 applies, or

D. if the report has a valuation date on or after December 31, 2017, the sum of the present value of the normal cost, the present value of the amount equal to the provision for adverse deviations in respect of the normal cost and the present value of the special payments determined in accordance with section 5 that would be required in respect of any plan amendment that increases going concern liabilities or in respect of any going concern unfunded liability determined using the benefit allocation method, if paragraph 2.0.1 applies.

(17) Paragraph 9 of subsection 4 (2.3) of the Regulation is amended by striking out “paragraph 1.2 or 2” and substituting “paragraph 1.2, 1.2.1, 2 or 2.0.1”.

(18) Paragraph 10 of subsection 4 (2.3) of the Regulation is amended by striking out “sub-subparagraph 7 ii A or B” and substituting “sub-subparagraph 7 ii A, B, C or D”.

(19) Clause 4 (2.4) (b) of the Regulation is amended by striking out “solvency deficiency” at the end and substituting “solvency deficiency, any reduced solvency deficiency and any consolidated prior solvency deficiency”.

(20) Section 4 of the Regulation is amended by adding the following subsection:

(2.6.1) If a report filed under section 3 or 14 with a valuation date on or after December 31, 2017 discloses, in respect of a jointly sponsored pension plan for which a benefit allocation method is used to set contribution rates, that an increase in the normal cost is required, an increase in the amount equal to the provision for adverse deviations in respect of the normal cost is required or an increase is required in the amount of contributions that were previously reduced under subsection 7 (3) or subsection 7.0.3 (1), payment of that increase shall commence on a date not later than 12 months after the valuation date.

(21) Subsection 4 (2.8) of the Regulation is revoked and the following substituted:

(2.8) In the case of a jointly sponsored pension plan, contributions referred to in subsection 39 (3) of the Act include contributions made by a member in respect of,

(a) any going concern unfunded liability;

(b) any amendment that increases going concern liabilities;

(d) any solvency deficiency, reduced solvency deficiency or consolidated prior solvency deficiency.

(22) Subsection 4 (3) of the Regulation is amended by striking out “(b), (c)” and substituting “(b), (b.1), (c)”.

(23) The English version of paragraph 3 of subsection 4 (4) of the Regulation is amended by striking out “normal costs” and substituting “normal cost” and by striking out “thirty” and substituting “30”.

(24) Subsection 4 (4) of the Regulation is amended by adding the following paragraph:

3.0.1 In the case of a pension plan that provides defined benefits, employer contributions for the normal cost reported under clause 13 (1) (a), clause 14 (7) (a) or clause 14 (8.0.2) (a) and contributions for the provision for adverse deviations in respect of the normal cost reported under subclause 13 (1) (b.1) (ii) or subclause 14 (8.0.2) (c) (ii) for each period covered by a report beginning on or after December 31, 2017, in monthly instalments within 30 days after the month for which contributions are payable, the amount of the instalments to be either a total fixed dollar amount, a fixed dollar amount for each employee or member of the plan or a fixed percentage either of the portion of the payroll related to members of the plan or of employee contributions.

(25) Paragraph 5 of subsection 4 (4) of the Regulation is amended by striking out “other than a payment made under paragraph 4”.

10. (1) Section 5 of the Regulation is amended by adding the following subsection:

(0.1) In this section,

“consolidated prior solvency deficiency” and “new solvency deficiency” have the same meaning as in section 5.5.3.

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

(1.0.0.1) After a report is filed with a valuation date on or after December 31, 2017 for a plan that is not a jointly sponsored pension plan listed in subsection 1.3.1 (3), except as otherwise provided in this section and in sections 4, 7 and 7.0.1, the special payments required to be made shall be not less than the sum of,

(a) for the year beginning on the valuation date of the last filed report, the special payments to liquidate any going concern unfunded liability scheduled for that year as determined in the report filed immediately before the last filed report, other than the special payments described in clauses (c) and (d);

(b) for each year after the year described in clause (a), the special payments required to liquidate any going concern unfunded liability determined in the last filed report, other than the special payments described in clauses (c) and (d), with interest at the going concern valuation interest rate, by equal monthly instalments over a period of 10 years beginning one year after the valuation date of the last filed report;

(c) the special payments required to liquidate a past service unfunded actuarial liability that arose on a valuation date of a report filed before May 1, 2018 with interest at the going concern valuation interest rate, by equal monthly instalments over a period of 15 years beginning on the date it arose;

(d) the special payments required to liquidate a past service unfunded actuarial liability that arose on a valuation date of a report filed on or after May 1, 2018, with interest at the going concern valuation interest rate, by equal monthly instalments over a period of 10 years beginning on the effective date of the pension plan;

(e) where a plan amendment increases the going concern liabilities of the plan, the special payments required to liquidate any increase in the going concern liabilities related to the amendment that exceeds the value of any contribution in respect of the increase before the effective date of the amendment, with interest at the going concern valuation interest rate, by equal monthly instalments over a period of eight years beginning on the effective date of the amendment;

(f) with respect to any reduced solvency deficiency, the special payments required to liquidate the reduced solvency deficiency, with interest at the rates described in subsection (2), by equal monthly instalments over a period of five years beginning on the valuation date of the report in which the reduced solvency deficiency was determined;

(g) with respect to any solvency deficiency that arose on a valuation date of a report filed before May 1, 2018, the special payments required to liquidate the solvency deficiency, with interest at the rates described in subsection (2), by equal monthly instalments over a period of five years beginning on the valuation date of the report in which the solvency deficiency was determined;

(h) despite clause (g), with respect to any new solvency deficiency permitted to be liquidated over 10 years in accordance with subparagraph 5.6 (6) 8 i or 8.1 i, subparagraph 5.6.1 (6) 6 i or 7 i or subparagraph 5.6.2 (6) 6 i or 7 i, the special payments required to liquidate the new solvency deficiency with interest at the rates described in subsection (2), by equal monthly instalments over the period permitted under the relevant subparagraph; and

(i) with respect to any consolidated prior solvency deficiency, the special payments required to liquidate the consolidated prior solvency deficiency, with interest at the rates described in subsection (2), by equal monthly instalments over a period of five years beginning on the valuation date of the report in which the consolidated prior solvency deficiency was determined.

(3) Subsection 5 (1.0.1) of the Regulation is revoked and the following substituted:

(1.0.1) Despite subsection (1) and clauses and (1.0.0.1) (f), (g) and (h), if the valuation date of the report is on or after September 30, 2011, the beginning of the amortization period for special payments to liquidate a solvency deficiency, reduced solvency deficiency or going concern unfunded liability referred to in those clauses and determined in the report may be deferred to a day that is not later than 12 months after the valuation date.

(1.0.2) Clause (1.0.0.1) (b) applies, and clause (1.0.0.1) (e) does not apply, with respect to an increase in the going concern unfunded liability that results from an amendment that,

(a) is made to confer a benefit improvement that is required by law;

(b) is filed before May 1, 2018; or

(c) implements a benefit improvement agreed to in a collective agreement before May 1, 2018 if the collective agreement is in place immediately before that date.

(4) Subsection 5 (1.1) of the Regulation is revoked and the following substituted:

(1.1) Despite subsections (1) and (1.0.0.1), in the case of a jointly sponsored pension plan, the special payments may be determined in accordance with subsection (1.2) as of,

(a) the date the going concern unfunded liability arose, in the case of special payments referred to in clauses (1) (b) and (1.0.0.1) (a), (b), (c) and (d);

(b) the date of an amendment to a pension plan that increases going concern liabilities, in the case of special payments referred to in clause (1.0.0.1) (e); or

(c) the date the solvency deficiency, reduced solvency deficiency or consolidated prior solvency deficiency arose, in the case of special payments referred to in clauses (1) (e) and (1.0.0.1) (f), (g), (h) and (i).

(5) Paragraph 3 of subsection 5 (1.2) of the Regulation is amended by striking out “going concern unfunded liability or solvency deficiency” and substituting “going concern unfunded liability, increase in going concern liabilities due to an amendment to the pension plan, consolidated prior solvency deficiency, reduced solvency deficiency or solvency deficiency”.

(6) Paragraph 4 of subsection 5 (1.2) of the Regulation is amended by adding “and subsection (1.0.0.1)” after “and (e)”.

(7) Subparagraphs 5 i and ii of subsection 5 (1.2) of the Regulation are revoked and the following substituted:

i. with respect to any going concern unfunded liability, using the interest rate or rates used in the report to determine the going concern unfunded liability,

ii. for a report with a valuation date on or after December 31, 2017 with respect to any going concern unfunded liability or increase in going concern liabilities due to an amendment to a pension plan, using the interest rate or rates used in the report to determine the going concern unfunded liabilities or increase in going concern liabilities due to the amendment, and

iii. with respect to any solvency deficiency, reduced solvency deficiency or consolidated prior solvency deficiency, using the interest rates used in the report to determine the solvency deficiency, reduced solvency deficiency or consolidated prior solvency deficiency.

(8) Subsection 5 (2) of the Regulation is revoked and the following substituted:

(2) The rates of interest to be used in calculating the special payments under clauses (1) (e) and (1.0.0.1) (f), (g), (h) and (i) with respect to a solvency deficiency, reduced solvency deficiency or consolidated prior solvency deficiency are the rates used in the report under section 14 in which the solvency deficiency, reduced solvency deficiency or consolidated prior solvency deficiency was determined for the applicable portions of the amortization period for the special payments.

(9) Subsection 5 (3) of the Regulation is amended by striking out “with respect to a solvency deficiency, the employer is required to make interest payments with respect to the solvency deficiency” and substituting “with respect to a solvency deficiency, reduced solvency deficiency or consolidated prior solvency deficiency, the employer is required to make interest payments with respect to the solvency deficiency, reduced solvency deficiency or consolidated prior solvency deficiency”.

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

(17.1) Despite subsection (17), if, on a valuation date on or after December 31, 2017, the sum of the solvency assets and the solvency asset adjustment exceeds the sum of 85 per cent of the solvency liabilities, 85 per cent of the solvency liability adjustment and the prior year credit balance (such excess being referred to in this subsection as the “solvency excess”), the special payments under clauses (1.0.0.1) (f), (g), (h) and (i) with respect to solvency deficiencies, reduced solvency deficiencies or consolidated prior solvency deficiencies arising before the valuation date that are scheduled for payment after the valuation date shall be adjusted in accordance with the following rules:

1. Where the solvency excess is greater than or equal to the present value of the special payments under clauses (1.0.0.1) (f), (g), (h) and (i), the special payments shall be reduced to zero.

2. Where the solvency excess is less than the present value of the special payments under clauses (1.0.0.1) (f), (g), (h) and (i), the monthly rate of the special payments shall not be changed but the amortization period or periods for the special payments shall be reduced so as to reduce the solvency excess to zero.

3. Despite paragraph 2, for the first report of a pension plan filed under section 3 or 14 or submitted under section 4 for which the valuation date is on or after December 31, 2017 and where the solvency excess is less than the present value of the special payments under clauses (1.0.0.1) (f), (g), (h) and (i), the monthly rate of the special payments may also be reduced so as to reduce the solvency excess to zero for any amortization period for which special payments end within six years after the valuation date.

4. Paragraph 3 does not apply for special payments in respect of a consolidated prior solvency deficiency established in a report with a valuation date on or after December 31, 2017.

(11) Paragraphs 3 and 4 of subsection 5 (17.1) of the Regulation, as made by subsection (10), are revoked.

11. (1) Paragraph 1 of subsection 5.6 (6) of the Regulation is amended by adding “but before December 31, 2017” after “solvency relief report”.

(2) Subsection 5.6 (6) of the Regulation is amended by adding the following paragraph:

1.1 For greater certainty, for a report with a valuation date on or after December 31, 2017, subsection 5 (17.1) applies with respect to adjusting the monthly rate of special payments or amortization periods for the special payments, and paragraph 1 does not apply.

(3) Subparagraph 8 iii of subsection 5.6 (6) of the Regulation is amended by striking out “the day on which the new solvency deficiency is liquidated” in the portion before sub-subparagraph A and substituting “December 31, 2017”.

(4) Subsection 5.6 (6) of the Regulation is amended by adding the following paragraph:

8.0.1 For greater certainty, for a report with a valuation date on or after December 31, 2017, clause 1.2 (1) (d.1) applies with respect to determining the solvency asset adjustment, and subparagraph 8 iii does not apply.

(5) Subparagraph 8.1 iii of subsection 5.6 (6) of the Regulation is amended by striking out “the new solvency deficiency is liquidated” in the portion before the formula and substituting “December 31, 2017”.

(6) Subsection 5.6 (6) of the Regulation is amended by adding the following paragraph:

8.2 For greater certainty, for a report with a valuation date on or after December 31, 2017, subsection 1.2 (2) applies with respect to determining the solvency asset adjustment, and subparagraph 8 iii does not apply.

12. (1) Paragraph 1 of subsection 5.6.1 (6) of the Regulation is amended by striking out “on a valuation date after the valuation date of the solvency relief report under this section” in the portion before subparagraph i and substituting “on a valuation date that is after the valuation date of the solvency relief report under this section but that is before December 31, 2017”.

(2) Subsection 5.6.1 (6) of the Regulation is amended by adding the following paragraph:

(3) Subparagraph 6 iv of subsection 5.6.1 (6) of the Regulation is amended by striking out “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 or the day on which the new solvency deficiency determined under section 5.6 is liquidated, whichever is later” in the portion before sub-subparagraph A and substituting “for a valuation date that is after the valuation date of the solvency relief report but that is before December 31, 2017”.

(4) Subsection 5.6.1 (6) of the Regulation is amended by adding the following paragraph:

6.1 For greater certainty, for a report with a valuation date on or after December 31, 2017, clause 1.2 (1) (d.1) applies with respect to determining the solvency asset adjustment, and subparagraph 6 iv does not apply.

(5) Subparagraph 7 iv of subsection 5.6.1 (6) of the Regulation is amended by striking out “but before the new solvency deficiency is liquidated or before the new solvency deficiency determined under section 5.6 is liquidated, whichever is later” in the portion before the formula and substituting “but that is before December 31, 2017”.

(6) Subsection 5.6.1 (6) of the Regulation is amended by adding the following paragraph:

7.1 For greater certainty, for a report with a valuation date on or after December 31, 2017, subsection 1.2 (2) applies with respect to determining the solvency asset adjustment, and subparagraph 7 iv does not apply.

13. (1) Subsection 5.6.2 (1) of the Regulation is amended by striking out “and before December 31, 2018” and substituting “and before May 1, 2018”.

(2) Paragraph 1 of subsection 5.6.2 (6) of the Regulation is amended by striking out “on a valuation date after the valuation date of the solvency relief report under this section” in the portion before subparagraph i and substituting “on a valuation date that is after the valuation date of the solvency relief report under this section but that is before December 31, 2017”.

(3) Subsection 5.6.2 (6) of the Regulation is amended by adding the following paragraph:

(4) Subparagraph 6 i of subsection 5.6.2 (6) of the Regulation is amended by adding “or clause 5 (1.0.0.1) (h)” after “5 (1)”.

(5) Subparagraph 6 v of subsection 5.6.2 (6) of the Regulation is amended by striking out “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, the day on which the new solvency deficiency determined under section 5.6 is liquidated or the day on which the new solvency deficiency determined under section 5.6.1 is liquidated, whichever is the latest” in the portion before sub-subparagraph A and substituting “for a valuation date that is after the valuation date of the solvency relief report but that is before December 31, 2017”.

(6) Subsection 5.6.2 (6) of the Regulation is amended by adding the following paragraph:

6.1 For greater certainty, for a subsequent report described in subparagraph 6 v with a valuation date on or after December 31, 2017, clause 1.2 (1) (d.1) applies with respect to determining the solvency asset adjustment, and subparagraph 6 v does not apply.

(7) Subparagraph 7 i of subsection 5.6.2 (6) of the Regulation is amended by adding “or clause 5 (1.0.0.1) (h)” after “5 (1)”.

(8) Subparagraph 7 v of subsection 5.6.2 (6) of the Regulation is amended by striking out “for a valuation date that is after the valuation date of the solvency relief report but before the new solvency deficiency is liquidated, before the new solvency deficiency determined under section 5.6 is liquidated or before the new solvency deficiency determined under section 5.6.1 is liquidated, whichever is the latest” in the portion before the formula and substituting “for a valuation date that is after the valuation date of the solvency relief report but that is before December 31, 2017”.

(9) Subsection 5.6.2 (6) of the Regulation is amended by adding the following paragraph:

7.1 For greater certainty, for a subsequent report described in subparagraph 7 v with a valuation date on or after December 31, 2017, subsection 1.2 (2) applies with respect to determining the solvency asset adjustment, and subparagraph 7 v does not apply.

14. Subsection 5.7 (7) of the Regulation is revoked and the following substituted:

(7) The administrator shall retain all notices of objection it receives until the earlier of the date the new solvency deficiency is liquidated and the date that is 11 years after the valuation date of the solvency relief report and shall provide copies of the notices to the Superintendent on request.

15. (1) Subsection 5.10 (3) of the Regulation is amended by striking out “until the new solvency deficiency has been liquidated” and substituting “until the earlier of the date the new solvency deficiency has been liquidated and the date that is 11 years after the valuation date of the solvency relief report”.

(2) Subsection 5.10 (4) of the Regulation is amended by adding the following paragraph:

7.1 For a progress report that is sent after a report with a valuation date on or after December 31, 2017, the estimated annual contributions required to fund the normal cost of the plan, the amount equal to the provision for adverse deviations in respect of the normal cost and all special payments set out in the report referred to in paragraph 6.

16. (1) Section 6 of the Regulation is amended by adding the following subsection:

(0.1) In this section,

“consolidated prior solvency deficiency” has the same meaning as in section 5.5.3.

(2) Subsection 6 (4.2) of the Regulation is amended by adding “for a report with a valuation date before December 31, 2017” after “clause (4) (a)” in the portion before paragraph 1.

(3) Section 6 of the Regulation is amended by adding the following subsections:

(4.3) For the purposes of clause (4) (a) for a report with a valuation date on or after December 31, 2017, the required contributions are sufficient if, for each year of the period covered by the report, they are not less than the sum of the following amounts, determined using a benefit allocation method:

1. The normal cost of the plan.

2. The amount equal to the provision for adverse deviations in respect of the normal cost of the plan.

3. The special payments set out in a previous report to be paid in the year following the valuation date with respect to any going concern unfunded liability, other than special payments for a past service unfunded actuarial liability set out in a previous report with a valuation date on or after December 31, 2017.

4. The special payments set out in a previous report with a valuation date on or after December 31, 2017 that remain to be paid in respect of any amendment that increases the going concern liabilities or past service unfunded actuarial liability.

5. The special payments set out in a previous report that remain to be paid with respect to any solvency deficiency, reduced solvency deficiency or consolidated prior solvency deficiency.

6. The special payments to be paid with respect to any going concern unfunded liability that is determined in the report.

7. The special payments to be paid with respect to any plan amendment that increases going concern liabilities or past service unfunded actuarial liability that is determined in the report.

8. The special payments to be paid with respect to any reduced solvency deficiency that is determined in the report.

(4.4) If the payments required under subsection (4.3) are greater than they would have been under subsection (4.2) as it read immediately before May 1, 2018, the required contributions are sufficient if, for each year of the period covered by the report, they are not less than the amount calculated using the formula,

A − [(A−B) × C]

in which,

“A” is the total of the payments required under subsection (4.3) for the year based on the most recent report filed,

“B” is the total of the payments that would have been required for the year under subsection (4.2) as it read immediately before May 1, 2018,

“C” is the value described in subsection (4.5).

(4.5) The value of “C” in the formula in subsection (4.4) is the value determined in accordance with the following:

i. The value of “C” is equal to one in the year that is the earlier of,

A. 2021, and

B. the year in which the collective agreement expires.

ii. In any year prior to the year described in subparagraph i, the value of “C” is equal to one.

iii. In the year immediately following the year described in subparagraph i, the value of “C” is equal to one.

iv. In the year immediately following the year described in subparagraph iii, the value of “C” is equal to 0.667.

v. In the year immediately following the year described in subparagraph iv, the value of “C” is equal to 0.333.

vi. In any year following the year described in subparagraph v, the value of “C” is zero.

2. For any other pension plan:

i. In the first year following the valuation date of the first report filed with a valuation date that is on or after December 31, 2017, the value of “C” is equal to one.

ii. In the year immediately following the year described in subparagraph i, the value of “C” is equal to 0.667.

iii. In the year immediately following the year described in subparagraph ii, the value of “C” is equal to 0.333.

iv. In any year following the year described in subparagraph iii, the value of “C” is zero.

17. (1) Subsection 6.0.4 (2) of the Regulation is amended by striking out “Subsections 6 (4.1) and (4.2)” at the beginning and substituting “Section 3.0.1, subsections 5 (1.0.0.1), 6 (4.1), (4.2) and (4.3), section 7.0.1 and subsection 11 (4)”.

(2) Section 6.0.4 of the Regulation is amended by adding the following subsections:

(2.1) Despite section 11.2, the provision for adverse deviations is zero with respect to a report to which this section applies.

(2.2) Despite subsection 1 (2), in respect of a report described in subsection (1),

“going concern assets” means the sum of,

(a) the value of the assets of the pension plan determined on the basis of a going concern valuation, including accrued and receivable income but excluding the amount of any letter of credit held in trust for the pension plan, and

(b) the present value of any special payments in respect of a going concern unfunded liability disclosed in previously filed reports.

18. The heading before section 7 of the Regulation is revoked and the following substituted:

Actuarial Gain, Going Concern Excess and Contribution Holidays

19. (1) Section 7 of the Regulation is amended by adding the following subsection:

(1.1) Subsection (1) does not apply to a report with a valuation date on or after December 31, 2017, unless the report is in respect of a jointly sponsored pension plan listed in subsection 1.3.1 (3).

(2) Subsection 7 (3) of the Regulation is amended by striking out “normal costs” and substituting “normal cost”.

(3) Subsection 7 (3.1) of the Regulation is amended by striking out the portion before clause (a) and substituting the following:

(3.1) Despite subsection (3), for a plan that provides defined benefits, other than designated plans or individual pension plans, for a fiscal year of the plan ending after June 29, 2017 and before January 1, 2020, an actuarial gain shall not be used to reduce contributions for the normal cost required to be made by an employer, by a person or entity required to make contributions on behalf of the employer, by members or by any of them for the year unless,

. . . . .

(4) Subsection 7 (4) of the Regulation is revoked.

20. The Regulation is amended by adding the following sections:

7.0.1 (1) The following rules about special payments apply with respect to a report with a valuation date on or after December 31, 2017 for a plan that is not a jointly sponsored pension plan listed in subsection 1.3.1 (3):

1. If the report discloses a going concern excess under the plan that is greater than or equal to the sum of the amounts listed in subsection (2), the special payments determined under clauses 5 (1.0.0.1) (a), (c), (d) and (e) shall be reduced to zero.

2. If the report discloses a going concern excess under the plan that is less than the sum of the amounts listed in subsection (2), the monthly rate of the special payments determined under clauses 5 (1.0.0.1) (a), (c), (d) and (e) shall not be changed but the amortization period or periods for the special payments determined under those clauses shall be reduced so as to reduce the going concern excess to zero.

(2) The amounts referred to in paragraphs 1 and 2 of subsection (1) are the following:

1. The present value of special payments in respect of any plan amendment that increases going concern liabilities.

2. The present value of special payments in respect of a going concern unfunded liability, other than a past service unfunded actuarial liability, determined in the report filed immediately before the current report and scheduled for payment within one year after the valuation date of the current report.

3. The present value of special payments in respect of any past service unfunded actuarial liability.

7.0.2 (1) For the purposes of section 55.1 of the Act, the available actuarial surplus of a pension plan is the following:

1. In the case of a plan with respect to which special payments are required or are deferred under subsection 5 (1.0.0.1) or (1.0.1) for the year, zero.

2. In the case of any other plan, the lesser of the following:

i. The amount by which the value of the assets of the pension plan, determined on the basis of a going concern valuation, including accrued and receivable income but excluding the amount of any letter of credit held in trust for the pension plan, exceeds the sum of going concern liabilities, the amount equal to the provision for adverse deviations in respect of going concern liabilities and the prior year credit balance.

ii. Whichever of the following amounts applies to the plan:

A. In the case of a plan that is a public sector pension plan, the amount that, if it were deducted from the solvency assets of the pension plan, would reduce the solvency ratio to 1.05.

B. In the case of any other plan, the amount that, if it were deducted from the solvency assets of the pension plan, would reduce the transfer ratio to 1.05.

(2) The amounts referred to in paragraph 2 of subsection (1) shall be based on figures from the last report of the plan filed under section 3 or 14 or submitted under section 4.

7.0.3 (1) In any year following the valuation date of the first report filed on or after December 31, 2017 for a plan that is not a jointly sponsored pension plan listed in subsection 1.3.1 (3), available actuarial surplus may be applied to reduce contributions for normal cost and contributions for the provision for adverse deviations in respect of the normal cost required to be made by the employer, by a person or entity required to make contributions on behalf of the employer, by the members of the pension plan or by any of them.

(2) Any available actuarial surplus not applied under subsection (1) may be applied to pay the annual assessment to the Guarantee Fund otherwise required by subsection 37 (1) to be paid by the employer.

(3) Despite subsections (1) and (2), for a plan that provides defined benefits, other than designated plans or individual pension plans, available actuarial surplus shall not be used to pay an annual assessment to the Guarantee Fund or to reduce contributions for the normal cost or contributions for the provision for adverse deviations in respect of the normal cost required to be made by an employer, by a person or entity required to make contributions on behalf of the employer, by members or by any of them for the fiscal year unless,

(a) the administrator files with the Superintendent within the first 90 days of the fiscal year an actuarial cost certificate for the fiscal year; and

(b) the amount applied to pay the annual assessment to the Guarantee Fund or to reduce the contributions for the year does not exceed the maximum amount determined under subsection (4) or (5).

(4) For the purposes of clause (3) (b), and subject to subsection (5), the maximum amount of any available actuarial surplus that may be applied to pay an annual assessment to the Guarantee Fund or to reduce contributions for the normal cost and contributions for the provision for adverse deviations in respect of the normal cost for a fiscal year is the lesser of,

(a) the amount, if any, of available actuarial surplus for the fiscal year reported in the last report of the plan filed under section 3 or 14 or submitted under section 4; and

(b) the amount, if any, of estimated available actuarial surplus for the fiscal year as reported in the actuarial cost certificate filed under section 7.1 for that fiscal year.

(5) If a report has been filed under section 3 or 14 or submitted under section 4 with a valuation date that is not earlier than the day immediately before the beginning of the fiscal year in which the report was filed or submitted, and the filing or submission took place after the actuarial cost certificate was filed but within the same fiscal year, clause (4) (b) does not apply with respect to the portion of the fiscal year that begins on the first day of the period covered by the report and ends on the last day of the fiscal year.

21. (1) Subsection 7.1 (2) of the Regulation is amended by striking out the portion before paragraph 1 and substituting the following:

(2) An actuarial cost certificate for a fiscal year before the fiscal year described in subsection (3) must contain the following:

. . . . .

(2) Section 7.1 of the Regulation is amended by adding the following subsection:

(3) An actuarial cost certificate for a fiscal year following a report filed with a valuation date on or after December 31, 2017 must contain the following:

1. An estimate of the normal cost of the plan for the fiscal year commencing on the valuation date of the certificate.

2. An estimate of the amount equal to the provision for adverse deviations in respect of the normal cost of the plan for the fiscal year commencing on the valuation date of the certificate.

3. An estimate of the total employee contributions to the plan to be made during that fiscal year.

4. The pension plan’s going concern assets, estimated going concern liabilities, estimated available actuarial surplus if applicable, solvency assets and estimated solvency liabilities, each determined as of the valuation date of the certificate.

5. The prior year credit balance.

6. Estimated liabilities for benefits, other than pension benefits and ancillary benefits payable under qualifying annuity contracts, that were excluded in calculating the solvency liabilities.

7. The estimated transfer ratio, calculated using the solvency assets and estimated solvency liabilities determined in the certificate.

8. If the pension plan is a public sector pension plan, the estimated solvency ratio, calculated using the solvency assets and estimated solvency liabilities determined in the certificate.

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

8. (1) The administrator shall give notice of a reduction of contributions under section 7.0.3 for the normal cost of the plan or of contributions for the provision for adverse deviations in respect of the normal cost of the plan.

(2) The notice shall be given to,

(a) every member of the plan;

(b) every trade union that represents members of the plan who are employed in Ontario;

(d) every retired member of the plan; and

(e) the advisory committee, if any, established under section 24 of the Act for the plan.

(3) The notice must contain the following:

1. A statement that the documents that create and support the pension plan and the pension fund do not prohibit the reduction of contributions.

2. A statement that contributions required to be made by the employer, by the members of the pension plan or by both of them will be reduced.

3. The period of time during which contributions will be reduced.

4. A statement that the reduction of contributions will not reduce the estimated transfer ratio of the pension plan to less than 1.05.

5. A statement that the plan’s going concern assets will be at least equal to the plan’s going concern liabilities plus the amount equal to the plan’s provision for adverse deviations in respect of going concern liabilities after the reduction of contributions for the period.

6. The estimated transfer ratio of the pension plan, calculated using the solvency assets and estimated solvency liabilities determined in the actuarial cost certificate.

(4) The notice must be given within the first six months of the fiscal year in which the planned reduction is to occur. However, a separate notice to a member, former member or retired member is not required if the administrator includes the information required under subsection (3) in the written statement that is required under section 27 of the Act in the same fiscal year.

23. Section 9 of the Regulation is amended by striking out “normal costs” and substituting “normal cost”.

24. Section 11 of the Regulation is amended by adding the following subsection:

(4) This section does not apply to a report with a valuation date on or after December 31, 2017 unless the report is in respect of a jointly sponsored pension plan listed in subsection 1.3.1 (3).

25. The Regulation is amended by adding the following sections:

Provision for Adverse Deviations

11.1 (1) The amount equal to the provision for adverse deviations in respect of the normal cost for a pension plan is the provision for adverse deviations determined under section 11.2 multiplied by the plan’s normal cost.

(2) For the purpose of subsection (1), the plan’s normal cost may exclude estimated future costs for escalated adjustments.

(3) The amount equal to the provision for adverse deviations in respect of going concern liabilities for a pension plan is the provision for adverse deviations determined under section 11.2 multiplied by the plan’s going concern liabilities as of the valuation date of the last filed report.

(4) For the purpose of subsection (3), the going concern liabilities of a plan may exclude estimated future costs for escalated adjustments and liabilities in respect of benefits for which an annuity contract has been purchased from an insurance company.

11.2 (1) In this section,

“closed plan” means a pension plan at least one portion of which, according to the terms of the plan, does not permit new members to join and accrue defined benefits; (“régime fermé”)

“non-fixed income assets” means assets other than fixed income assets. (“actif à revenu non fixe”)

(2) The provision for adverse deviations for a pension plan on a particular valuation date is the percentage calculated using the formula,

A + B + C

in which,

“A” is 0.05 for a closed plan and 0.04 for a plan that is not a closed plan,

“B” is the value determined under subsection (3), and

“C” is the greater of,

(a) zero, and

(b) the value equal to the plan’s duration of going concern liabilities calculated under subsection (5) multiplied by the amount by which “D” exceeds “E” where,

“D” is the plan’s going concern valuation interest rate which shall be gross of any provision for expenses paid or expected to be paid from the fund and may be net of any provision for expenses paid or expected to be paid from the fund for active management of investments, and

“E” is the plan’s benchmark discount rate calculated under subsections (7) to (12).

(3) The value of “B” for the purposes of subsection (2) is the value determined under Table 1 to this section based on the plan’s combined target asset allocation for non-fixed income assets, as determined under subsection (4), in accordance with the following rules:

1. The value of “B” is the value in Column 3 or Column 4 of Table 1, whichever applies, opposite the combined target asset allocation for the non-fixed income assets of the plan under Column 2 of Table 1.

2. If the combined target asset allocation for non-fixed income assets falls between two values in Column 2 of Table 1, the value of “B” shall be interpolated linearly from the values in Column 3 or 4 of Table 1, whichever applies.

(4) The plan’s combined target asset allocation for non-fixed income assets shall be determined in accordance with the formula,

100% − J

in which,

“J” is the combined target asset allocation for fixed income assets, determined under subsection (8).

(5) For the purposes of determining the value of “C” under subsection (2), the value equal to the plan’s duration of going concern liabilities shall be calculated using the formula,

(F − G) / (G × 0.01)

in which,

“F” is the value of the plan’s going concern liabilities as of the valuation date, determined using a discount rate that is 1 per cent less than the discount rate used in the report, and

“G” is the value of the plan’s going concern liabilities as of the valuation date.

(6) For the purposes of determining the values of “F” and “G” in subsection (5), the going concern liabilities of the plan may exclude estimated future costs for escalated adjustments and liabilities in respect of benefits for which an annuity contract has been purchased from an insurance company.

(7) For the purposes of determining the value of “E” under subsection (2), the plan’s benchmark discount rate is the amount calculated using the formula,

0.005 + H + (0.015 × J) + (0.05 × K)

in which,

“H” is the benchmark yield on long-term bonds issued by the Government of Canada for the valuation date, as determined from the Canadian Socio-Economic Information Management System (CANSIM) series V 39056 compiled by Statistics Canada and available on the website of the Bank of Canada,

“J” is the combined target asset allocation for fixed income assets, determined under subsection (8), and

“K” is the combined target asset allocation for non-fixed income assets, determined under subsection (4).

(8) Subject to subsections (9) to (11), for the purposes of the value of “J” in subsections (4) and (7), the plan’s combined target asset allocation for fixed income assets shall be determined in accordance with the formula,

[L + (0.5 × M) + (N × P) + (0.5 × N × Q)] / (100% − R)

in which,

“L” is the sum of the plan’s target asset allocations for each of the investment categories listed in paragraphs 1, 3, 4, 5, 15 and 16 of subsection 76 (12), excluding any portions of the target asset allocations that are allocated to the assets described in “R”, expressed as a percentage,

“M” is the sum of the plan’s target asset allocations for each of the investment categories listed in paragraphs 6 to 11 and 17 of subsection 76 (12), excluding any portions of the target asset allocations that are allocated to the assets described in “R”, expressed as a percentage,

“N” is the plan’s target asset allocation for the investment category listed in paragraph 2 of subsection 76 (12), expressed as a percentage,

“P” is the proportion of “N” that is allocated to the investment categories listed in paragraphs 1, 3, 4, 5, 15 and 16 of subsection 76 (12), expressed as a percentage,

“Q” is the proportion of “N” that is allocated to the investment categories listed in paragraphs 6 to 11 and 17 of subsection 76 (12), expressed as a percentage, and

“R” is the portion of the plan’s target asset allocation for each investment category listed in paragraphs 1, 3 to 11 and 15 to 17 of subsection 76 (12), expressed as a percentage, that is allocated to annuity contracts that have been purchased from an insurance company in respect of benefits.

(9) In determining the values of “L” and “P” in subsection (8), a target asset allocation for an investment category listed in paragraph 4, 15 or 16 of subsection 76 (12) shall not be included unless the following criteria are met:

1. The plan’s statement of investment policies and procedures must set out a minimum rating for target investment allocations of fixed income assets in the investment category that is given by a credit rating agency recognized by a competent authority.

2. At the time at which the values of “L” and “P” are determined, the minimum rating described in paragraph 1 must be at or above one of the following ratings:

i. The rating set out in Column 3 or 4 of Table 2 to this section, as applicable, opposite a credit rating agency in Column 2 of that Table.

ii. A rating that is equivalent to the rating described in subparagraph i and that is given by another credit rating agency recognized by a competent authority.

(10) The target asset allocation to be used in determining the values of “L”, “M”, “N”, “P”, “Q” and “R” in subsection (8) is the target asset allocation in the plan’s statement of investment policies and procedures that is in effect at the time at which the determination is made.

(11) Subject to subsection (12), for a report with a valuation date before December 31, 2019, a plan’s actual asset allocations to the applicable investment categories on the valuation date of the report, as set out in the plan’s financial statements, may be used instead of the plan’s target asset allocations in determining the values of “L”, “M”, “N”, “P”, “Q” and “R” in subsection (8).

(12) If a plan’s actual asset allocations are used under subsection (11), the plan’s actual asset allocation for an investment category listed in paragraph 4, 15 or 16 of subsection 76 (12) shall not be included unless, at the time at which the determination is made, the minimum rating of the asset is at or above one of the following ratings:

1. The rating set out in Column 3 or 4 of Table 2 to this section, as applicable, opposite a credit rating agency in Column 2 of that Table.

2. A rating that is equivalent to the rating described in paragraph 1 and that is given by another credit rating agency recognized by a competent authority.

(13) Despite anything else in this section, the provision for adverse deviations is deemed to be zero for,

(a) a jointly sponsored pension plan listed in subsection 1.3.1 (3); and

(b) a pension plan’s liabilities in respect of defined contribution benefits.

TABLE 1
Value of “B” for the purposes of subsection (2)

Column 1 Item	Column 2 Combined target asset allocation for non-fixed income assets	Column 3 Value of “B” for closed plan	Column 4 Value of “B” for plan other than closed plan
1.	0%	0	0
2.	20%	0.02	0.01
3.	40%	0.04	0.02
4.	50%	0.05	0.03
5.	60%	0.07	0.04
6.	70%	0.11	0.06
7.	80%	0.15	0.08
8.	100%	0.23	0.12

TABLE 2
minimum fixed income asset ratings for the purposes of SUBSECTIONs (9) and (12)

Column 1 Item	Column 2 Credit rating agency	Column 3 Rating - bond market securities	Column 4 Rating - money market securities
1.	DBRS	BBB	R-2 (middle)
2.	Fitch Ratings	BBB-	F-3
3.	Moody’s Investors Service	Baa3	P-3
4.	Standard & Poor’s	BBB-	A-3

26. (1) Subsection 13 (1) of the Regulation is amended by adding the following clause:

(b.1) for a pension plan that has a provision for adverse deviations that is greater than zero,

(i) the provision for adverse deviations for the plan, calculated in accordance with section 11.2, and

(ii) the estimated contributions required to pay the amount equal to the provision for adverse deviations in respect of the normal cost for each year up to the date of the next report;

(2) Clause 13 (1) (j) of the Regulation is revoked and the following substituted:

(j) where the plan provides for an escalated adjustment,

(i) the liability for the future costs of the adjustment included in the determination of the plan’s going concern liabilities,

(ii) the future costs for the adjustment included in the normal cost,

(iii) whether and to what extent liabilities for the future costs of the adjustment are taken into account when determining the provision for adverse deviations in respect of the going concern liabilities, and

(iv) whether and to what extent future costs of the adjustment are taken into account when determining the provision for adverse deviations in respect of the normal cost.

(3) Section 13 of the Regulation is amended by adding the following subsection:

(1.0.1) For a plan with an effective date that is on or after January 31, 2018 and on or before May 1, 2018, the administrator shall submit the report described in subsection (1) on or before July 31, 2018.

(4) Subsection 13 (1.1) of the Regulation is amended by adding the following clause:

(a.1) whether there is a reduced solvency deficiency;

(5) Clause 13 (1.1) (b) of the Regulation is revoked and the following substituted:

(b) if there is a solvency deficiency, the amount of the solvency deficiency;

(b.1) if there is a reduced solvency deficiency, the amount of the reduced solvency deficiency and the special payments required to liquidate it in accordance with section 5;

(6) Section 13 of the Regulation is amended by adding the following subsection:

(1.1.1) The report shall also set out any available actuarial surplus for each year up to the date of the next report.

27. (1) Section 14 of the Regulation is amended by adding the following subsection:

(0.2) In this section,

“consolidated prior solvency deficiency” has the same meaning as in section 5.5.3.

(2) Subsection 14 (7) of the Regulation is amended by adding “with a valuation date before December 31, 2017 or that is in respect of a jointly sponsored pension plan listed in subsection 1.3.1 (3)” after “this section” in the portion before clause (a).

(3) Subsection 14 (8) of the Regulation is amended by adding “with a valuation date before December 31, 2017 or that is in respect of a jointly sponsored pension plan listed in subsection 1.3.1 (3)” after “this section” in the portion before clause (a).

(4) Clause 14 (8) (c) of the Regulation is amended by adding “in subsection 1 (2)” before “that are being excluded”.

(5) Clause 14 (8) (e.1) of the Regulation is amended by striking out “if applicable, the amount described in subclause 37 (4) (a) (ii)” at the end and substituting “if applicable, the value of “B” described in subsection 37 (4)”.

(6) Section 14 of the Regulation is amended by adding the following subsections:

(8.0.1) Subsections (8.0.2) to (8.0.6) do not apply to reports in respect of jointly sponsored pension plans listed in subsection 1.3.1 (3).

(8.0.2) Each report under this section with a valuation date on or after December 31, 2017 shall set out, on the basis of a going concern valuation,

(a) the normal cost in the year following the valuation date of the report and the rule for computing the cost in subsequent years up to the valuation date of the next report;

(b) an estimate of the normal cost in the subsequent years up to the valuation date of the next report;

(i) the provision for adverse deviations for the plan, calculated in accordance with section 11.2, and

(ii) the estimated contributions required to pay the amount that is equal to the provision for adverse deviations in respect of the normal cost for each year up to the date of the next report;

(d) the estimated aggregate employee contributions to the pension plan during the year following the valuation date of the report and the subsequent years up to the valuation date of the next report;

(e) the special payments remaining to be paid after the valuation date with respect to any plan amendment that increases going concern liabilities;

(f) the special payments required with respect to any going concern unfunded liability determined in the previously filed report in accordance with section 5;

(g) the special payments remaining to be paid after the valuation date to liquidate a past service unfunded actuarial liability;

(h) if there is a going concern unfunded liability in the report, the amount of the going concern unfunded liability and the special payments required in respect of it in accordance with section 5;

(i) in the case of a specified Ontario multi-employer pension plan, if there is a going concern unfunded liability in the report, the amount of the going concern unfunded liability and the special payments required to liquidate it in accordance with section 6.0.4;

(j) the present value of future special payments remaining to be paid after the valuation date with respect to any plan amendment that increases going concern liabilities;

(k) the present value of future special payments remaining to be paid after the valuation date with respect to a past service unfunded actuarial liability;

(l) where the plan provides for an escalated adjustment,

(i) the liability for the future costs of the adjustment included in the determination of the plan’s going concern liabilities,

(ii) the future costs for the adjustment included in the normal cost,

(iv) whether and to what extent future costs of the adjustment are taken into account when determining the provision for adverse deviations in respect of the normal cost; and

(m) the going concern excess or going concern unfunded liability in the plan and, where there is a going concern excess, any intended application of that excess in accordance with section 7.0.1.

(8.0.3) Clauses (8.0.2) (e), (f), (g) and (h) do not apply to a report that is in respect of a specified Ontario multi-employer pension plan.

(8.0.4) Each report under this section with a valuation date on or after December 31, 2017 shall also set out, on the basis of a solvency valuation,

(a) whether there is a solvency deficiency;

(b) whether there is a reduced solvency deficiency;

(c) the special payments remaining to be paid after the valuation date with respect to the solvency deficiency, reduced solvency deficiency or consolidated prior solvency deficiency determined in any previously filed report;

(d) if there is a reduced solvency deficiency in the report, the amount of the reduced solvency deficiency and the special payments required to liquidate it in accordance with section 5;

(e) if there is a solvency deficiency in the report, the amount of the solvency deficiency;

(f) the liabilities referred to in clauses (a) to (h) of the definition of “solvency liabilities” in subsection 1 (2) that are being excluded from the calculation of the solvency liabilities;

(g) whether there is a Guarantee Fund assessment required to be paid under section 37;

(h) if a Guarantee Fund assessment is required to be paid, the PBGF assessment base, the PGBF liabilities and, if applicable, the value of “B” described in subsection 37 (4);

(i) whether the transfer ratio is less than one;

(j) if the transfer ratio is less than one, the transfer ratio; and

(k) the solvency ratio.

(8.0.5) Each report under this section with a valuation date on or after December 31, 2017 shall set out any available actuarial surplus for each year up to the date of the next report.

(8.0.6) If the report indicates that contributions were determined using subsection 4 (2.1.1) or 6 (4.4), the report shall include the information required by clauses (7) (c.1), (c.2), (d), (e) and (f) and (8) (b.1) of this section, calculated in accordance with those provisions as they read immediately before May 1, 2018.

(7) Subsection 14 (8.1) of the Regulation is amended by striking out “and” at the end of clause (b), by revoking clause (c), and by substituting the following:

(c) include the information required under subsection (7) or (8.0.2), as applicable, determined using a benefit allocation method; and

(d) include the information required under subsection (8) or (8.0.4), (8.0.5) and (8.0.6), as applicable.

(8) Section 14 of the Regulation is amended by adding the following subsection:

(10.1) Despite subsection (10), for a report required under this section with a valuation date that is on or after December 31, 2017 and before March 1, 2018, the administrator shall file the report on or before November 30, 2018.

28. Subsection 17 (1) of the Regulation is amended by adding “or reduced solvency deficiency” after “solvency deficiency”.

29. (1) Clause 26 (1) (b) of the Regulation is revoked and the following substituted:

(b) the value of the liabilities of the pension plan shall be the greater of “A” and “B” or, if a benefit allocation method is not used to set contribution rates, the greatest of “A”, “B” and “C”, where,

“A” is the sum of going concern liabilities determined using a benefit allocation method and the amount equal to the provision for adverse deviations in respect of going concern liabilities determined using the benefit allocation method, as disclosed in the last valuation report,

“B” is the sum of solvency liabilities and liabilities for benefits, other than pension benefits and ancillary benefits payable under qualifying annuity contracts, that were excluded in calculating the solvency liabilities, and

“C” is the going concern liabilities determined under the actuarial cost method used by the plan.

(2) Subsection 26 (2) of the Regulation is revoked and the following substituted:

(2) For the purposes of the definition of “B” in subclause 79 (1) (d) (i) of the Act and subclause 79 (1) (d) (ii) of the Act, the liabilities of the pension plan are the greater of “D” and “E”, or, if a benefit allocation method is not used to set contribution rates, the greatest of “D”, “E” and “F”, where,

“D” is the sum of going concern liabilities determined using a benefit allocation method and the amount equal to the provision for adverse deviations in respect of going concern liabilities determined using the benefit allocation method,

“E” is the sum of the solvency liabilities and the liabilities for benefits, other than pension benefits and ancillary benefits payable under qualifying annuity contracts, that were excluded in calculating the solvency liabilities, and

“F” is the going concern liabilities determined under the actuarial cost method used by the plan.

30. (1) Subsection 37 (4) of the Regulation is revoked and the following substituted:

(4) If the assessment date falls on or after January 1, 2019, the amount of the annual assessment is the amount calculated using the formula,

A + B

in which,

“A” is the lesser of “C” and “D” where,

“C” is the sum of the following amounts:

1. 0.75 per cent of any portion of the PBGF assessment base that is less than 10 per cent of the PBGF liabilities.

2. 1.5 per cent of any portion of the PBGF assessment base that is 10 per cent or more but less than 20 per cent of the PBGF liabilities.

3. 2.25 per cent of any portion of the PBGF assessment base that is 20 per cent or more of the PBGF liabilities.

4. 0.015 per cent of PBGF liabilities; and

“D” is $600 multiplied by the number of persons who were Ontario plan beneficiaries at the end of the plan fiscal year immediately preceding the assessment date, and

“B” is zero or, if an election under subsection 5 (18) is in effect on the assessment date, three per cent of the amount by which “E” exceeds “F” where,

“E” is the amount of the additional liability that would result if, on the valuation date of the last report filed or submitted on or before the assessment date under any of section 3, 4 or 14 for the plan, all plant closure benefits and permanent layoff benefits under the plan were payable for those members in Ontario who, on that date, met the age and service requirements for those benefits, and

“F” is the amount, if any, by which the amount determined under clause (b) of the definition of “PBGF assessment base” in subsection 1 (2) exceeds the PBGF liabilities, both determined as of the valuation date referred to in the definition of “E”.

(2) Subsection 37 (14.1) of the Regulation is revoked.

31. (1) Subclause 40 (1) (p) (v) of the Regulation is revoked and the following substituted:

(v) the transfer ratio of the pension plan as of the valuation date of the report filed most recently under section 13 or 14,

(v.1) the estimated transfer ratio calculated as of the end of the period covered by the statement, calculated in accordance with paragraph 7 of subsection 7.1 (3), and

(2) Clause 40 (1) (q) of the Regulation is revoked and the following substituted:

(q) in the case of a statement required to be provided to members before a report with a valuation date before December 31, 2017 is filed and where special payments are being made to liquidate any liability, a statement to that effect;

(q.1) in the case of a statement required to be provided to members after a report with a valuation date on or after December 31, 2017 is filed and where special payments are being made in respect of any going concern unfunded liability, a statement to that effect;

(q.2) in the case of a statement required to be provided to members after a report with a valuation date on or after December 31, 2017 is filed and where special payments are being made to liquidate any reduced solvency deficiency to increase the plan’s solvency ratio to 85 per cent, a statement to that effect;

(3) Subclause 40 (1) (u) (v) of the Regulation is amended by adding “or reduced solvency deficiency” after “solvency deficiency”.

(4) Section 40 of the Regulation is amended by adding the following subsections:

(3) For a plan that provides defined benefits, the first statement required to be provided to a member after a report with a valuation date on or after December 31, 2017 is filed shall also contain a description of how funding rules for pension plans have changed or will change as a result of amendments to this Regulation effective May 1, 2018, including at least the following information:

1. A description of the difference between solvency funding and going concern funding.

2. A statement that special payments are required under this Regulation for the purpose of increasing the plan’s funded ratio to 85 per cent, as measured on a solvency basis, and that this is a change from the previous requirement to make special payments for the purpose of increasing the plan’s funded ratio to 100 per cent, as measured on a solvency basis.

3. A statement that before the amendments to this Regulation were made, going concern unfunded liabilities were amortized over 15 years and new payment schedules were added when needed but were not consolidated in each new report of the pension plan.

4. A statement that as a result of the amendments to this Regulation, any going concern unfunded liability will be required to be amortized over 10 years and that the payment schedules will be consolidated in each new report of the pension plan.

5. A statement that contributions for the provision for adverse deviations are required under this Regulation and are required to be funded on a going concern basis.

(4) Subsection (3) does not apply to a jointly sponsored pension plan listed in subsection 1.3.1 (3) or a specified Ontario multi-employer pension plan.

32. (1) Subclause 40.1 (1) (m) (i) of the Regulation is revoked and the following substituted:

(i) the transfer ratio of the pension plan as of the valuation date of the report filed most recently under section 13 or 14,

(i.1) the estimated transfer ratio calculated as of the end of the period covered by the statement, calculated in accordance with paragraph 7 of subsection 7.1 (3), and

(2) Clause 40.1 (1) (n) of the Regulation is revoked and the following substituted:

(n) in the case of a statement required to be provided to a former member before a report with a valuation date before December 31, 2017 is filed and where special payments are being made to liquidate any liability, a statement to that effect;

(n.1) in the case of a statement required to be provided to a former member after a report with a valuation date on or after December 31, 2017 is filed and where special payments are being made in respect of any going concern unfunded liability, a statement to that effect;

(n.2) in the case of a statement required to be provided to a former member after a report with a valuation date on or after December 31, 2017 is filed and where special payments are being made to liquidate any reduced solvency deficiency to increase the plan’s solvency ratio to 85 per cent, a statement to that effect;

(3) Subclause 40.1 (1) (r) (iii) is amended by adding “or reduced solvency deficiency” after “solvency deficiency”.

(4) Section 40.1 of the Regulation is amended by adding the following subsections:

(4) For a plan that provides defined benefits, the first statement required to be provided to a former member after a report with a valuation date on or after December 31, 2017 is filed shall also contain a description of how funding rules for pension plans have changed or will change as a result of amendments to this Regulation effective May 1, 2018, including at least the following information:

1. A description of the difference between solvency funding and going concern funding.

5. A statement that contributions for the provision for adverse deviations are required under this Regulation and are required to be funded on a going concern basis.

(5) Subsection (4) does not apply to a jointly sponsored pension plan listed in subsection 1.3.1 (3) or a specified Ontario multi-employer pension plan.

33. (1) Subclause 40.2 (1) (l) (i) of the Regulation is revoked and the following substituted:

(i) the transfer ratio of the pension plan as of the valuation date of the report filed most recently under section 13 or 14,

(i.1) the estimated transfer ratio calculated as of the end of the period covered by the statement, calculated in accordance with paragraph 7 of subsection 7.1 (3), and

(2) Clause 40.2 (1) (m) of the Regulation is revoked and the following substituted:

(m) in the case of a statement required to be provided to a retired member before a report with a valuation date before December 31, 2017 is filed and where special payments are being made to liquidate any liability, a statement to that effect;

(m.1) in the case of a statement required to be provided to a retired member after a report with a valuation date on or after December 31, 2017 is filed and where special payments are being made in respect of any going concern unfunded liability, a statement to that effect;

(m.2) in the case of a statement required to be provided to a retired member after a report with a valuation date on or after December 31, 2017 is filed and where special payments are being made to liquidate any reduced solvency deficiency to increase the plan’s solvency ratio to 85 per cent, a statement to that effect;

(3) Subclause 40.2 (1) (q) (iii) is amended by adding “or reduced solvency deficiency” after “solvency deficiency”.

(4) Section 40.2 of the Regulation is amended by adding the following subsections:

(4) For a plan that provides defined benefits, the first statement required to be provided to a retired member after a report with a valuation date on or after December 31, 2017 is filed shall also contain a description of how funding rules for pension plans have changed or will change as a result of amendments to this Regulation effective May 1, 2018, including at least the following information:

1. A description of the difference between solvency funding and going concern funding.

5. A statement that contributions for the provision for adverse deviations are required under this Regulation and are required to be funded on a going concern basis.

(5) Subsection (4) does not apply to a jointly sponsored pension plan listed in subsection 1.3.1 (3) or a specified Ontario multi-employer pension plan.

34. Paragraph 3 of subsection 47.1 (1) of the Regulation is amended by striking out “2, 3, 4 and 5” and substituting “3, 3.0.1 and 5”.

35. Paragraph 3 of section 47.2 of the Regulation is amended by striking out “2, 3, 4 and 5” and substituting “3, 3.0.1 and 5”.

36. Subsection 47.7.1 (2) of the Regulation is amended by striking out “1.2 and 2” and substituting “1.2, 1.2.1 and 2”.

37. Clause 76 (14) (e) of the Regulation is amended by striking out “normal costs” and substituting “normal cost”.

38. Section 78 of the Regulation is amended by adding the following subsections:

(7) The statement of investment policies and procedures shall include the plan’s target asset allocation for each investment category listed in subsection 76 (12).

(8) The target asset allocation for an investment category is the target proportion of the plan’s assets invested in a particular investment category in proportion to the total target investment in all investment categories, expressed as a percentage.

39. (1) The definition of “B” in the English version of subsection 4 (2) of Schedule 4 to the Regulation is amended by striking out “are adjusted” and substituting “is adjusted”.

(2) Section 4 of Schedule 4 to the Regulation is amended by adding the following subsection:

(2.1) If the amount of the letter of credit is reduced, the employer is not required to make the payment referred to in sub-subparagraph 6 iv B of subsection (1) into the pension fund if, as of the date of the most recent report with a valuation date on or after December 31, 2017 filed under section 3 or 14 or submitted under section 3 or 13, “A” minus “B” is less than or equal to “C” where,

“A” is 85 per cent of the sum of the solvency liabilities and the solvency liability adjustment,

“B” is the sum of the solvency assets and the amount, which may be positive or negative, by which the value of the solvency assets is adjusted as a result of applying an averaging method that stabilizes short-term fluctuations in the market value of the plan assets, calculated over a period of not more than five years, and

“C” is the present value of the total amount of all letters of credit held in trust for the pension fund, after the reduction in the amount of the letter of credit.

(3) Subsection 4 (3) of Schedule 4 to the Regulation is revoked and the following substituted:

(3) The present value of the total amount of all letters of credit held in trust for the pension fund must be determined, for the purposes of the definition of “C” in subsection (2) or (2.1), using the same interest rates as those used to determine the amount of the solvency deficiency or reduced solvency deficiency set out in the report referred to in the applicable subsection.

Commencement

40. (1) Subject to subsections (2) to (4), this Regulation comes into force on the later of the day subsection 1 (4) of Schedule 33 to the Stronger, Fairer Ontario Act (Budget Measures), 2017 comes into force and the day it is filed.

(2) Section 8 comes into force on the latest of the following days:

1. The day the Regulation is filed.

2. The day section 5 of the Securing Pension Benefits Now and for the Future Act, 2010 comes into force.

3. The day subsection 3 (2) of Schedule 33 to the Stronger, Fairer Ontario Act (Budget Measures), 2017 comes into force.

(3) Subsection 10 (11) comes into force on January 1, 2021.

(4) Subsections 30 (1), 31 (1), 32 (1) and 33 (1) come into force on January 1, 2019.

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O. Reg. 250/18: GENERAL

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