O. Reg. 389/24: GENERAL"

O. Reg. 389/24: GENERAL, Filed October 16, 2024 under Pension Benefits Act, R.S.O. 1990, c. P.8

ontario regulation 389/24

made under the

Pension Benefits Act

Made: October 10, 2024
Filed: October 16, 2024
Published on e-Laws: October 16, 2024
Published in The Ontario Gazette: November 2, 2024

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

(GENERAL)

1. (1) The definition of “special payment” in subsection 1 (1) of Regulation 909 of the Revised Regulations of Ontario, 1990 is amended by adding “or section 11 of the Target Benefits Regulation” at the end.

(2) The definitions of “going concern assets”, “going concern excess”, “going concern funded ratio”, “going concern unfunded liability” and “provision for adverse deviations” in subsection 1 (2) of the Regulation are revoked and the following substituted:

“going concern assets” means,

(a) in respect of a report under this Regulation relating to a pension plan that does not provide target benefits, the sum of,

(i) 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,

(ii) 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

(iii) 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),

(A) 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,

(B) 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

(C) 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), and

(b) in respect of a report under this Regulation relating to a pension plan that provides target benefits, the sum of,

(i) the value of the assets of the pension plan determined on the basis of a going concern valuation, including accrued and receivable income,

(ii) the present value of any special payments described in paragraph 1 and subparagraph 2 i of subsection 11 (1) of the Target Benefits Regulation disclosed in previously filed reports, and

(iii) the present value of any special payments described in subparagraph 2 ii of subsection 11 (1) of the Target Benefits Regulation in respect of any plan amendment that increases going concern liabilities; (“actif à long terme”)

“going concern excess” means,

(a) in respect of a pension plan that does not provide target benefits, the amount, if any, by which the going concern assets of the pension plan exceed the sum of,

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

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

(iii) the prior year credit balance of the pension plan, and

(b) in respect of a pension plan that provides target benefits, the amount, if any, by which the going concern assets of the pension plan exceed the going concern liabilities of the pension plan; (“excédent à long terme”)

“going concern funded ratio” means,

(a) in relation to a pension plan that does not provide target benefits, 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, and

(b) in relation to a pension plan that provides target benefits, the ratio of “AA” to “BB” where,

“AA” is the value of the assets of the pension plan related to target benefits determined on the basis of a going concern valuation, including accrued and receivable income, and

“BB” is the total amount of the going concern liabilities of the pension plan related to target benefits; (“ratio de capitalisation à long terme”)

“going concern unfunded liability” means,

(a) in respect of a report under this Regulation relating to a pension plan that does not provide target benefits,

(i) 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

(ii) 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, and

(b) in respect of a report under this Regulation relating to a pension plan that provides target benefits, the amount, if any, by which the going concern liabilities exceeds the going concern assets; (“passif à long terme non capitalisé”)

“provision for adverse deviations” means,

(a) in relation to a pension plan that does not provide target benefits, the percentage determined under section 11.2 to be the provision for adverse deviations, and

(b) in relation to a pension plan that provides target benefits, the percentage determined under section 14 of the Target Benefits Regulation as the provision for adverse deviations; (“provision pour écarts défavorables”)

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

“market value ratio”, in relation to a report for a plan that provides target benefits, means the ratio of the market value of the plan’s assets related to target benefits to the plan’s going concern liabilities related to target benefits, determined using the benefit allocation method used in the tests to demonstrate the sufficiency of contributions for the plan under subsection 10 (3) of the Target Benefits Regulation; (“ratio de la valeur marchande”)

“Target Benefits Regulation” means Ontario Regulation 386/24 (Target Benefits) made under the Act; (“règlement sur les prestations cibles”)

(4) The definition of “solvency liabilities” in subsection 1 (2) of the Regulation is amended by adding “and subclause 14 (8.0.4.3) (d) (i)” after “clauses 14 (8) (c) and 14 (8.0.4) (f)” in the portion before clause (a).

(5) Subsection 1 (5) of the Regulation is amended by striking out “a transfer deficiency and a transfer ratio” and substituting “a transfer deficiency, a transfer ratio and a market value ratio”.

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

Plan amendments

(1) If an amendment to a pension plan reduces or increases contributions, or if an amendment creates or changes a going concern unfunded liability or, in the case of a plan that provides defined benefits, creates or changes a solvency deficiency, the administrator shall file a report containing the following:

1. Any of the information required in a report under section 14 that might be affected by the amendment.

2. A description of the lump sum benefit improvement contribution, if any.

3. In the case of a plan that provides defined benefits, the plan’s going concern funded ratio on the date the amendment is effective.

(2) Subsection 3 (1.1) of the Regulation is amended by striking out “where all the pension benefits” and substituting “if all the pension benefits”.

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

(1.1.0.1) Subsection (1) does not apply with respect to an amendment that relates to a conversion under section 81.0.2 of the Act.

(4) Subsection 3 (1.1.2) of the Regulation is amended by striking out “clause (1) (c)” and substituting “paragraph 1 of subsection (1)”.

3. Subsection 4 (2.3) of the Regulation is amended by striking out “clause (a) of the definition” wherever it appears and substituting in each case “subclause (a) (i) of the definition”.

4. Paragraph 1 of subsection 4.1 (19) of the Regulation is amended by striking out “Clause (a) of the definition” at the beginning and substituting “Subclause (a) (i) of the definition”.

5. Section 5 of the Regulation is amended by adding the following subsection:

(1.0.3) The following rules apply in the case of a pension plan that provided target benefits but for which one or more of the criteria specified in subsection 39.2 (1) of the Act are no longer satisfied:

1. If special payments are required to liquidate any amount to which subparagraph 1 i of subsection 11 (1) of the Target Benefits Regulation previously applied, clauses (1.0.0.1) (c), (d) and (e) of this section do not apply with respect to those special payments and instead the sum determined under subsection (1.0.0.1) shall include those special payments with interest at the going concern valuation interest rate, by equal monthly instalments over a period of eight years beginning on the valuation date of the report in which the increase in the going concern unfunded liability was determined.

2. If special payments are required to liquidate any amount to which subparagraph 2 ii of subsection 11 (1) of the Target Benefits Regulation previously applied, clauses (1.0.0.1) (d) and (e) of this section do not apply to those special payments and instead the sum determined under subsection (1.0.0.1) shall include those special payments 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 amendment.

6. The French version of clause 6 (4) (a) of the Regulation is amended by striking out “analyses” and substituting “tests”.

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

Ceasing to be a SOMEPP

6.0.6 (1) Within 60 days after a plan ceases to be a specified Ontario multi-employer pension plan, the administrator shall give written notice to each member, former member and retired member of the plan.

(2) The written notice shall contain the following information:

1. The name and provincial registration number of the plan.

2. The name and contact information for the administrator.

3. The transfer ratio of the plan.

4. A statement that the plan is no longer a specified Ontario multi-employer pension plan and an explanation of how that could affect benefits.

(3) Within 60 days after a plan ceases to be a specified Ontario multi-employer pension plan, the administrator shall file a copy of the notice required by subsection (1) with the Chief Executive Officer and shall give a copy to every employer who makes contributions to the plan and to every bargaining agent who represents members of the plan.

8. Section 6.3 of the Regulation is amended by adding the following paragraph:

4. A pension plan that provides target benefits.

9. Subsection 7.0.3 (1) of the Regulation is amended by adding “determined under section 7.0.2” after “available actuarial surplus”.

10. Subsection 11.1 (3) of the Regulation is amended by striking out “as of the valuation date of the last filed report” at the end.

11. (1) Section 11.2 of the Regulation is amended by adding the following subsections:

(11.1) Subject to subsection (12), for a report with a valuation date within two years after the date a pension plan ceases to be a specified Ontario multi-employer pension plan, the 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).

(11.2) Subject to subsection (12), if benefits provided under a pension plan were previously target benefits but became defined benefits as a result of one or more of the criteria under subsection 39.2 (1) of the Act no longer being satisfied, for a report with a valuation date within two years of the date the benefits became defined benefits, the 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) of this section.

(2) Subsection 11.2 (12) of the Regulation is amended by striking out “subsection (11)” in the portion before paragraph 1 and substituting “subsection (11), (11.1) or (11.2)”.

12. (1) Subclause 13 (1) (b.1) (i) of the Regulation is revoked and the following substituted:

(i) the provision for adverse deviations for the plan, determined under section 11.2 of this Regulation or section 14 of the Target Benefits Regulation, as applicable, and

(2) Subsection 13 (1) of the Regulation is amended by adding the following clauses:

(b.2) for a pension plan that provides target benefits and has a provision for adverse deviations that is zero, the provision for adverse deviations for the plan determined under section 14 of the Target Benefits Regulation;

. . . . .

(h) in the case of a plan that provides target benefits, the going concern funded ratio and the information about stress testing listed in section 14.1;

(3) Subclause 13 (1) (j) (iii) of the Regulation is amended by striking out “provision for adverse deviations in respect of the going concern liabilities” and substituting “provision for adverse deviations in respect of going concern liabilities”.

(4) Subsection 13 (1.1) of the Regulation is amended by striking out “The report shall also set out” in the portion before clause (a) and substituting “The report for a plan that provides defined benefits shall also set out”.

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

(1.1.0.1) The report for a plan that provides target benefits shall also set out,

(a) on the basis of a solvency valuation, the transfer ratio; and

(b) an explanation of how the provision for adverse deviations for the plan was developed in compliance with the plan’s funding and benefits policy.

(6) Subsection 13 (1.1.1) of the Regulation is revoked and the following substituted:

(1.1.1) If section 55.1 of the Act applies with respect to the pension plan, the report shall also set out any available actuarial surplus for each year up to the date of the next report.

(7) Subsection 13 (4) of the Regulation is amended by striking out “where all the pension benefits” and substituting “if all the pension benefits”.

13. (1) Subsection 14 (0.1) of the Regulation is amended by striking out “where all the pension benefits” and substituting “if all the pension benefits”.

(2) Subsection 14 (2) of the Regulation is amended by adding “for a plan that provides defined benefits” after “a report” in the portion before paragraph 1.

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

(2.1) For the purposes of subsection (3), a report for a plan that provides target benefits indicates funding concerns if either of the following circumstances exist:

1. The ratio of the going concern assets to the going concern liabilities is less than 0.85.

2. If, in any year covered by the report, the value of “B” described in subsection 10 (5) of the Target Benefits Regulation is greater than zero.

(4) Subsection 14 (3) of the Regulation is amended by striking out “solvency concerns, the next report” and substituting “solvency concerns, or where a report filed under this section indicates funding concerns, the next report”.

(5) Subsection 14 (6) of the Regulation is revoked.

(6) Subclause 14 (8.0.2) (c) (i) of the Regulation is revoked and the following substituted:

(i) the provision for adverse deviations for the plan, determined under section 11.2 of this Regulation or section 14 of the Target Benefits Regulation, as applicable, and

(7) Subsection 14 (8.0.2) of the Regulation is amended by adding the following clause:

(c.1) for a pension plan that provides target benefits and has a provision for adverse deviations that is zero, the provision for adverse deviations for the plan determined under section 14 of the Target Benefits Regulation;

(8) Clause 14 (8.0.2) (f) of the Regulation is amended by striking out “the special payments” at the beginning and substituting “in the case of a plan that provides defined benefits, the special payments”.

(9) Subsection 14 (8.0.2) of the Regulation is amended by adding the following clause:

(f.1) in the case of a plan that provides target benefits, the special payments remaining to be paid after the valuation date with respect to the going concern unfunded liability determined in any of the previously filed reports, as determined under section 11 of the Target Benefits Regulation;

(10) Clause 14 (8.0.2) (h) of the Regulation is amended by adding “or section 11 of the Target Benefits Regulation, as applicable” at the end.

(11) Subclause 14 (8.0.2) (l) (iii) of the Regulation is amended by striking out “provision for adverse deviations in respect of the going concern liabilities” and substituting “provision for adverse deviations in respect of going concern liabilities”.

(12) Clause 14 (8.0.2) (m) of the Regulation is amended by adding “or section 12 of the Target Benefits Regulation, as applicable” at the end.

(13) Subsection 14 (8.0.4) of the Regulation is amended by adding “in respect of a plan that provides defined benefits” before “shall also set out” in the portion before clause (a).

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

(8.0.4.3) Each report under this section in respect of a plan that provides target benefits shall also set out,

(a) the information about stress testing listed in section 14.1;

(b) the going concern funded ratio;

(d) on the basis of a solvency valuation,

(i) 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,

(ii) the transfer ratio; and

(e) an explanation of how the provision for adverse deviations for the plan was developed in compliance with the plan’s funding and benefits policy.

(15) Subsection 14 (8.0.5) of the Regulation is revoked and the following substituted:

(8.0.5) If section 55.1 of the Act applies with respect to the pension plan, each report under this section shall set out any available actuarial surplus for each year up to the date of the next report.

(16) Clause 14 (8.1) (d) of the Regulation is amended by striking out “(8.0.4), (8.0.5) and (8.0.6)” and substituting “(8.0.4) to (8.0.6)”.

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

Same, target benefits — stress testing

14.1 (1) For the purposes of clauses 13 (1) (h) and 14 (8.0.4.3) (a), the information about stress testing that must be included in a report in respect of a plan that provides target benefits is the following:

1. A description of how each material risk identified in the plan’s funding and benefits policy could, in the actuary’s opinion, cause the actual experience of the plan to be substantially different from the expected experience such that benefit reductions may be needed.

2. For each material risk, an explanation of the rationale for the actuary’s opinion.

3. For each material risk, a description of its potential effect on the funded position of the plan and any changes to benefits or contributions that would be needed as a result of such effect in order to ensure the sufficiency of the contributions under section 10 of the Target Benefits Regulation.

(2) The information required for the purposes of paragraph 3 of subsection (1) shall be prepared using the assumption that there are no effects attributable to any other material risk on the funded position of the plan.

15. Paragraph 1 of subsection 16.3 (2) of the Regulation is amended by striking out “where all the pension benefits” and substituting “if all the pension benefits”.

16. Subsection 19 (1.0.1) of the Regulation is revoked.

17. Section 21 of the Regulation is amended by adding the following subsection:

(2) In the case of a person who exercises their entitlement under paragraph 2 of subsection 73 (2) of the Act, the amount to be transferred must be transferred into a life income fund.

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

Limitations re entitlement to transfer

22.2.1 (1) The limitations set out in this section apply with respect to a person’s entitlement under paragraph 2 of subsection 73 (2) of the Act to the transfer of an amount into a life income fund.

(2) The following limitations apply if the person entitled to the transfer is a retired member of the pension plan:

1. If the person has a qualifying spouse or former spouse, and if the pension benefit payable to the qualifying spouse or former spouse is payable for the life of the person, the person is not entitled to the transfer unless the qualifying spouse or former spouse gives their consent.

2. If, upon the person’s death, another person is entitled to a survivor benefit under the pension plan, the person is not entitled to the transfer unless the other person gives their consent.

(3) The following limitations apply if the person entitled to the transfer is a qualifying spouse or former spouse of a retired member of the pension plan:

1. If the pension benefit payable to the qualifying spouse or former spouse is payable for the life of the retired member, the qualifying spouse or former spouse is not entitled to the transfer unless the retired member gives their consent.

(4) The person’s direction under subsection 42 (4) of the Act about their entitlement must include the following declarations:

1. Depending upon the circumstances,

i. the person’s declaration that there is no qualifying spouse or former spouse who is entitled to payment of a pension benefit which is payable for the life of the retired member, or

ii. a declaration signed by the qualifying spouse or former spouse who is entitled to payment of the pension benefit stating that they consent to the transfer under subsection 42 (1) of the Act.

2. Depending upon the circumstances,

i. the person’s declaration that no other person is entitled to a survivor benefit under the pension plan upon the person’s death, or

ii. a declaration signed by the person entitled to the survivor benefit stating that they consent to the transfer under subsection 42 (1) of the Act.

3. Depending upon the circumstances,

i. the person’s declaration that they are not a qualifying spouse or former spouse who is entitled to payment of a pension benefit which is payable for the life of the retired member, or

ii. a declaration signed by the retired member stating that they consent to the transfer under subsection 42 (1) of the Act.

(5) In this section,

“qualifying spouse or former spouse” means a spouse or former spouse who is entitled to payment of a pension benefit by virtue of an order made under Part I (Family Property) of the Family Law Act or under a family arbitration award or a domestic contract.

19. (1) Subsection 24 (3) of the Regulation is amended by adding “or target benefits” at the end of the portion before paragraph 1.

(2) Paragraph 3 of subsection 24 (3) of the Regulation is amended by striking out “Rate: The interest” at the beginning and substituting “Defined Benefit Rate: For a plan that provides defined benefits, the interest”.

(3) Subsection 24 (3) of the Regulation is amended by adding the following paragraph:

3.1 Target Benefit Rate: For a plan that provides target benefits, the interest on contributions, other than additional voluntary contributions, must be calculated at a rate that is not less than the lesser of the bank deposit rate and the pension fund rate of return and that is not greater than the pension fund rate of return.

(4) Section 24 of the Regulation is amended by adding the following subsection:

(4.1) For a pension plan that provides both defined contribution benefits and target benefits, the contributions must be credited with the interest described in subsection (2) or (3), whichever is appropriate in the circumstances.

20. Paragraph 12 of subsection 28 (2) of the Regulation is amended by striking out the portion before subparagraph i and substituting the following:

12. In the case of a plan providing defined benefits or target benefits,

. . . . .

21. (1) Subsection 29 (2) of the Regulation is amended by striking out “in respect of a person who exercises his or her entitlement under subsection 73 (2) of the Act” and substituting “in respect of a person who exercises their entitlement under paragraph 1 of subsection 73 (2) of the Act”.

(2) Subsection 29 (2.1) of the Regulation is amended by striking out “subsection 14 (2) or (3)” and substituting “subsection 14 (2), (3) or (3.1)”.

(3) Section 29 of the Regulation is amended by adding the following subsection:

(2.2) If a pension plan is being wound up, the minimum commuted value of a pension in respect of a person who exercises their entitlement under paragraph 2 of subsection 73 (2) of the Act is determined as follows:

1. Calculate the commuted value of the person’s pension as of the effective date of the wind up in accordance with section 3500 (“Pension Commuted Values”) of the Standards of Practice of the Actuarial Standards Board, published by the Canadian Institute of Actuaries, as amended from time to time, but as if the person were a member who would receive an immediate pension and as if subsection 14 (1) of the Act applied in respect of the pension plan.

2. Adjust the calculation under paragraph 1 in order to reflect the pension payments made from the effective date of the wind up to the beginning of the month in which the transfer is made under subsection 42 (1) of the Act.

(4) Subsection 29 (5) of the Regulation is amended by striking out “a defined benefit” and substituting “a defined benefit or a target benefit”.

(5) Clause 29 (7) (b) of the Regulation is amended by adding “or target benefits” after “defined benefits”.

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

Target benefits — additional information

38.1 (1) The following information is prescribed for the purpose of clause 25 (1) (c) of the Act if the person who will be eligible or is required to become a member of the pension plan will be entitled to target benefits under the plan:

1. An explanation of how benefits provided under the plan are funded, including a statement that contributions to the plan are fixed and that benefits, including benefits accrued under the plan, may be reduced.

2. A summary of the plan’s funding and benefits objectives that are contained in the plan’s funding and benefits policy.

3. A statement that the benefits provided under the plan are not guaranteed by the Guarantee Fund.

4. The going concern funded ratio of the plan as of the valuation date of the report filed most recently under section 3, 13 or 14.

5. An explanation of the going concern funded ratio and a description of how it relates to the level of funding of members’ benefits.

6. An explanation that, upon termination of plan membership, the member may be entitled to elect a transfer of the commuted value of their deferred pension.

7. If the terms of the plan require that the calculation of the commuted value incorporates a reduction by the going concern funded status of the plan consistent with actuarial standards, an explanation of this requirement.

8. An explanation of how, because the plan’s funding and benefits objectives depend on risk pooling, a member could have a lower income in retirement than the accrued target benefit if, on termination of membership or wind up of the pension plan, the member chooses to transfer the commuted value of their benefit out of the plan.

9. A statement that the administrator of the plan is required, under section 29 of the Act, to do the following:

i. Make available to a member for inspection without charge copies of the following:

A. Any statements of investment policies and procedures for the plan that are established under Part II.

B. The plan’s funding and benefits policy, its governance policy and its communications policy, and any document that amends any of the policies.

ii. On receipt of a written request and payment of the applicable fee, provide, by mail or electronically, copies of the following:

A. The plan’s most recent statement of investment policies and procedures established under Part II.

B. The documents mentioned in subsubparagraph i B.

10. A statement that a member is entitled, under section 30 of the Act, to do the following:

i. Inspect, at the office of the Chief Executive Officer during business hours of that office, the copies mentioned in subparagraph 9 i.

ii. Make a written request and pay the applicable fee for the Chief Executive Officer to provide, by mail or electronically, the copies mentioned in subparagraph 9 ii.

(2) In the case of a plan that converted benefits to target benefits, the following rules apply:

1. Despite paragraph 2 of subsection (1), the information mentioned in that paragraph is not prescribed if the administrator of the plan provides the information required under subsection 25 (1) of the Act,

i. before the day that is one year after the effective date of the conversion of benefits of the plan to target benefits, and

ii. before the funding and benefits policy has been filed.

2. In addition to the information required in paragraphs 9 and 10 of subsection (1), if the circumstances described in paragraph 1 of this subsection apply, the following statements are prescribed for the purpose of clause 25 (1) (c) of the Act:

i. A statement that the plan’s funding and benefits policy, its communications policy and its governance policy must be filed within one year after the effective date of conversion.

ii. A statement that the policies mentioned in subparagraph i will not be available until they are filed.

Notice of proposed amendment — prescribed information, target benefits

38.2 (1) The following additional information must be included in a notice required by subsection 26 (1) of the Act about a proposed amendment that relates to target benefits provided by the pension plan:

1. The going concern funded ratio of the plan as of the valuation date of the report filed most recently under section 3, 13 or 14 and the going concern funded ratio of the plan, calculated assuming the proposed amendment is in effect.

2. An explanation of the going concern funded ratio and a description of how it relates to the level of funding of members’ benefits.

3. If the recipient of the notice is a member or former member of the plan, the annual amount of the member or former member’s pension benefit payable at the normal retirement date, calculated assuming the proposed amendment is in effect and calculated assuming the proposed amendment is not in effect.

4. If the recipient of the notice is a retired member of the plan, the annual amount of the pension payable to the retired member as of the effective date of the proposed amendment, calculated assuming the proposed amendment is in effect and calculated assuming the proposed amendment is not in effect.

5. If the recipient of the notice is a person, other than a member, former member or retired member, who is entitled to benefits under the plan, the amount of the benefit payable to the person as of the effective date of the proposed amendment, calculated assuming the proposed amendment is in effect and calculated assuming the proposed amendment is not in effect.

6. If the proposed amendment is an action taken by the administrator, under clause 10 (7) (b) of the Target Benefits Regulation, for the purpose of meeting the funding requirements of section 10 of the Target Benefits Regulation,

i. the valuation date of the relevant report that identifies the requirement to take such action,

ii. a statement that contributions to the plan are not sufficient to meet the plan’s funding requirements without amending the plan and that the plan’s funding requirements would be met with the proposed amendment, and

iii. a statement that the proposed amendment is consistent with the plan’s funding and benefits policy.

7. If the recipient of the notice is a person described in subsection 29 (1) of the Act, a statement that the administrator of the plan is required, under section 29 of the Act, to do the following:

i. Make available to the recipient for inspection without charge copies of the following:

A. Any statements of investment policies and procedures for the plan that are established under Part II.

B. The plan’s funding and benefits policy, its communications policy and its governance policy and any document that amends any of the policies.

ii. On receipt of a written request and payment of the applicable fee, provide, by mail or electronically, copies of the following:

A. The plan’s most recent statement of investment policies and procedures established under Part II.

B. The documents mentioned in subsubparagraph i B.

8. If the recipient of the notice is a person described in subsection 29 (1) of the Act, a statement that the recipient is entitled, under section 30 of the Act, to do the following:

i. Inspect, at the office of the Chief Executive Officer during business hours of that office, the documents mentioned in subparagraph 7 i.

ii. Make a written request and pay the applicable fee for the Chief Executive Officer to provide the documents mentioned in subparagraph 7 ii by mail or electronically.

(2) Paragraphs 3, 4 and 5 of subsection (1) do not apply if the recipient’s entitlement is not altered by the proposed amendment.

23. (1) Subsection 39 (1) of the Regulation is amended by striking out “sixty days” and substituting “60 days”.

(2) Section 39 of the Regulation is amended by adding the following subsections:

(1.1) If the amendment relates to a conversion of benefits to target benefits under section 81.0.2 of the Act, the following rules apply:

1. The notice and explanation of the amendment shall also be provided, within 60 days after registration, to every participating employer, to any trade union that represents members of the plan and to any associations mentioned in subsection 81.0.2 (9) of the Act.

2. The notice and explanation of the amendment sent to a member, former member, retired member or other person who is or will be affected by an amendment under subsection (1) must also include the information required by section 38.1.

3. For a person to whom the notice and explanation must be sent under paragraph 2 whose benefits are subject to pension benefits legislation of a designated jurisdiction, the notice and explanation of the amendment must also explain the impact of conversion on the person’s benefit, including the following:

i. How benefits have been converted to target benefits for the purposes of Ontario law.

ii. How elements of the pension benefits legislation of the designated jurisdiction continue to apply to the pension plan.

(1.2) If the amendment relates to the filing of the plan’s funding and benefits policy in circumstances described in subsection 7 (1) of Ontario Regulation 387/24 (Written Policies under Section 10 of the Act) made under the Act, the notice and explanation of the amendment must also include a summary of the plan’s funding and benefits objectives.

24. (1) Subsection 40 (1) of the Regulation is amended by adding the following clause:

(n.1) In the case of a plan providing target benefits,

(i) the member’s years of employment for the purpose of the calculation of pension benefits, determined as of the end of the period covered by the statement,

(ii) the annual amount of the pension benefit payable at the normal retirement date accrued at the end of the period covered by the statement,

(iii) where salary is a factor in determining a pension benefit, the salary level utilized for the purpose of determining the benefit,

(iv) information as to whether the pension referred to in subclause (ii) is reduced by an amount of pension payable under the Canada Pension Plan, Quebec Pension Plan or Old Age Security Act (Canada),

(v) a statement that the member’s benefits, including accrued benefits, may be reduced,

(A) while the plan is ongoing, in accordance with the terms of the plan, including the plan’s funding and benefits policy, and

(B) on the wind up of the plan, if the assets of the plan are not sufficient to meet the liabilities of the plan,

(vi) a statement explaining that any unreduced pension in connection with early retirement to which the member may be entitled may be reduced in the circumstances set out in subclause (v),

(vii) a statement that the pension benefits established under the plan are not guaranteed by the Guarantee Fund,

(viii) the going concern funded ratio of the plan as of the valuation date of the report filed most recently under section 3, 13 or 14,

(ix) the estimated going concern funded ratio calculated as of the end of the period covered by the statement,

(x) an explanation of the going concern funded ratio and how it relates to the level of funding of members’ benefits,

(xi) a statement that no employer is entitled to payment of surplus under the plan,

(xii) a statement that the administrator of the plan is required, under section 29 of the Act,

(A) to make available to the member for inspection without charge copies of the plan’s funding and benefits policy, its governance policy and its communications policy and copies of any document that amends any of the policies, and

(B) on receipt of a written request and payment of the applicable fee, to provide, by mail or electronically, the copies mentioned in subsubclause (A), and

(xiii) a statement that the member is entitled, under section 30 of the Act,

(A) to inspect, at the office of the Chief Executive Officer during business hours of that office, copies of the plan’s funding and benefits policy, its governance policy and its communications policy and copies of any document that amends any of the policies, and

(B) to make a written request and pay the applicable fee for the Chief Executive Officer to provide, by mail or electronically, the copies mentioned in subsubclause (A);

(2) Clause 40 (1) (p) of the Regulation is amended by striking out the portion before subclause (i) and substituting the following:

(p) in the case of a plan providing defined benefits,

. . . . .

(3) Clause 40 (1) (t) of the Regulation is amended by adding “that provide defined benefits” after “for multi-employer pension plans” in the portion before subclause (i).

(4) Subclause 40 (1) (w) (ii) of the Regulation is revoked and the following substituted:

(ii) upon receipt of a written request and payment of the applicable fee, to provide by mail or electronically a copy of the most recent statement of investment policies and procedures that is established for the plan; and

(5) Subclauses 40 (1) (x) (i) and (ii) of the Regulation are revoked and the following substituted:

(i) to inspect, at the office of the Chief Executive Officer during business hours of that office, copies of any statements of investment policies and procedures that are established for the plan, and

(ii) to make a written request and pay the applicable fee for the Chief Executive Officer to provide a copy of the most recent statement of investment policies and procedures by mail or electronically.

(6) Subsection 40 (2.1) of the Regulation is amended by striking out “where all the pension benefits provided under the pension plan are defined contribution benefits and the investments are directed entirely by the members” at the end and substituting “if all the pension benefits provided under the pension plan are defined contribution benefits and the investments are directed entirely by the members”.

25. (1) Subsection 40.1 (1) of the Regulation is amended by adding the following clause:

(k.1) in the case of a plan providing target benefits,

(i) a statement that the former member’s deferred pension and any other benefits may be reduced,

(A) while the plan is ongoing, in accordance with the terms of the plan, including the plan’s funding and benefits policy, and

(B) on the wind up of the plan, if the assets of the plan are not sufficient to meet the liabilities of the plan,

(ii) a statement explaining that any unreduced pension in connection with early retirement to which the former member may be entitled may be reduced in the circumstances set out in subclause (i),

(iii) a statement that the pension benefits established under the plan are not guaranteed by the Guarantee Fund,

(iv) the going concern funded ratio of the plan as of the valuation date of the report filed most recently under section 3, 13 or 14,

(v) the estimated going concern funded ratio calculated as of the end of the period covered by the statement,

(vi) an explanation of the going concern funded ratio and how it relates to the level of funding of former members’ benefits,

(vii) a statement that no employer is entitled to payment of surplus under the plan,

(viii) a statement that the administrator of the plan is required, under section 29 of the Act,

(A) to make available to the former member for inspection without charge copies of the plan’s funding and benefits policy, its governance policy and its communications policy and copies of any document that amends any of the policies, and

(B) on receipt of a written request and payment of the applicable fee, to provide, by mail or electronically, the copies mentioned in subsubclause (A), and

(ix) a statement that the former member is entitled, under section 30 of the Act,

(B) to make a written request and pay the applicable fee for the Chief Executive Officer to provide, by mail or electronically, the copies mentioned in subsubclause (A);

(2) Clause 40.1 (1) (m) of the Regulation is amended by striking out the portion before subclause (i) and substituting the following:

(m) in the case of a plan providing defined benefits,

. . . . .

(3) Clause 40.1 (1) (q) of the Regulation is amended by adding “that provide defined benefits” after “for multi-employer pension plans” in the portion before subclause (i).

(4) Clause 40.1 (1) (t) (ii) of the Regulation is revoked and the following substituted:

(5) Subclauses 40.1 (1) (u) (i) and (ii) of the Regulation are revoked and the following substituted:

(6) Subsection 40.1 (3.1) of the Regulation is amended by striking out “where all the pension benefits provided under the pension plan are defined contribution benefits and the investments are directed entirely by the members” at the end and substituting “if all the pension benefits provided under the pension plan are defined contribution benefits and the investments are directed entirely by the members”.

26. (1) Subsection 40.2 (1) of the Regulation is amended by adding the following clause:

(k.1) in the case of a plan providing target benefits,

(i) a statement that the retired member’s pension and any other benefits may be reduced,

(A) while the plan is ongoing, in accordance with the terms of the plan, including the plan’s funding and benefits policy, and

(B) on the wind up of the plan, if the assets of the plan are not sufficient to meet the liabilities of the plan,

(ii) a statement that the pension benefits established under the plan are not guaranteed by the Guarantee Fund,

(iii) the going concern funded ratio of the pension plan as of the valuation date of the report filed most recently under section 3, 13 or 14,

(iv) the estimated going concern funded ratio calculated as of the end of the period covered by the statement,

(v) an explanation of the going concern funded ratio and how it relates to the level of funding of retired members’ benefits,

(vi) a statement that no employer is entitled to payment of surplus under the plan,

(vii) a statement that the administrator of the plan is required, under section 29 of the Act,

(A) to make available to the retired member for inspection without charge copies of the plan’s funding and benefits policy, its governance policy and its communications policy and copies of any document that amends any of the policies, and

(B) on receipt of a written request and payment of the applicable fee, to provide, by mail or electronically, the copies mentioned in subsubclause (A), and

(viii) a statement that the retired member is entitled, under section 30 of the Act,

(B) to make a written request and pay the applicable fee for the Chief Executive Officer to provide, by mail or electronically, the copies mentioned in subsubclause (A);

(2) Clause 40.2 (1) (l) of the Regulation is amended by striking out the portion before subclause (i) and substituting the following:

(l) in the case of a plan providing defined benefits,

. . . . .

(3) Clause 40.2 (1) (p) of the Regulation is amended by adding “that provide defined benefits” after “for multi-employer pension plans” in the portion before subclause (i).

(4) Subclause 40.2 (1) (s) (ii) of the Regulation is revoked and the following substituted:

(5) Subclauses 40.2 (1) (t) (i) and (ii) of the Regulation are revoked and the following substituted:

(6) Subsection 40.2 (3.1) of the Regulation is amended by striking out “where all the pension benefits provided under the pension plan are defined contribution benefits and the investments are directed entirely by the members” at the end and substituting “if all the pension benefits provided under the pension plan are defined contribution benefits and the investments are directed entirely by the members”.

27. (1) Clause 41 (1) (n) of the Regulation is revoked and the following substituted:

(n) the transfer value of the deferred pension determined in accordance with subsection 19 (2) or the commuted value of the deferred pension determined in accordance with section 16 of the Target Benefits Regulation, as applicable;

(2) Clause 41 (1) (o) of the Regulation is amended by striking out “and” in the portion before subclause (i) and substituting “and, for a transfer under section 42 of the Act in respect of defined benefits”.

(3) Subsection 41 (1) of the Regulation is amended by striking out “and” at the end of clause (r), by adding “and” at the end of clause (s) and by adding the following clause:

(t) in the case of a pension plan providing target benefits,

(i) a statement that the member’s deferred pension and any other benefits may be reduced,

(A) while the plan is ongoing, in accordance with the terms of the plan, including the plan’s funding and benefits policy, and

(B) on the wind up of the plan, if the assets of the plan are not sufficient to meet the liabilities of the plan,

(ii) the going concern funded ratio of the plan as of the valuation date of the report filed most recently under section 3, 13 or 14,

(iii) an explanation of the going concern funded ratio and a description of how it relates to the level of funding of members’ benefits, and

(iv) an explanation of how, because the plan’s funding and benefits objectives depend on risk pooling, a member could have a lower income in retirement than the accrued target benefit if the member chooses to transfer the commuted value of their benefit out of the plan.

28. Section 43 of the Regulation is amended by adding the following subsection:

(1.2) If the benefit described in subsection (1) relates to a deceased member’s, former member’s or retired member’s target benefits under the pension plan, in addition to the information set out in subsection (1.1), the statement shall contain at least the following information:

1. If the deceased member’s, former member’s or retired member’s benefits were reduced after receipt of the last statement under subsection 27 (1) or (2) of the Act, as applicable, the amount of the reduction and a description of when the reduction was implemented.

2. If the benefit described in subsection (1) provides an entitlement to, or an option to receive, a pension or deferred pension,

i. the going concern funded ratio of the plan as of the valuation date of the report filed most recently under section 3, 13 or 14,

ii an explanation of the going concern funded ratio and how it relates to the level of funding of the pension or deferred pension, and

iii. a statement that the pension or deferred pension may be reduced,

A. while the plan is ongoing, in accordance with the terms of the plan, including the plan’s funding and benefits policy, and

B. on the wind up of the plan, if the assets of the plan are not sufficient to meet the liabilities of the plan.

3. If the spouse, beneficiary or legal representative is a person described in subsection 29 (1) of the Act, a statement that the administrator of the plan is required, under section 29 of the Act,

i. to make available to the spouse, beneficiary or legal representative, for inspection without charge copies of the plan’s funding and benefits policy, its governance policy and its communications policy and copies of any document that amends any of the policies, and

ii. on receipt of a written request and payment of the applicable fee, to provide, by mail or electronically, the copies mentioned in subparagraph i.

4. If the spouse, beneficiary or legal representative is a person described in subsection 29 (1) of the Act, a statement that the spouse, beneficiary or legal representative is entitled, under section 30 of the Act,

i. to inspect, at the office of the Chief Executive Officer during business hours of that office, copies of the plan’s funding and benefits policy, its governance policy and its communications policy and copies of any document that amends any of the policies, and

ii. to make a written request and pay the applicable fee for the Chief Executive Officer to provide, by mail or electronically, the copies mentioned in subparagraph i.

29. Subsection 44 (3) of the Regulation is amended by striking out “and” at the end of clause (m), by adding “and” at the end of clause (n) and by adding the following clause:

(o) In the case of a pension plan providing target benefits, a statement that the pension to which the member is or will be entitled and any other benefits may be reduced,

(i) while the plan is ongoing, in accordance with the terms of the plan, including the plan’s funding and benefits policy, and

(ii) on the wind up of the plan, if the assets of the plan are not sufficient to meet the liabilities of the plan.

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

Ceasing to provide target benefits — notice to members, etc.

46.1 (1) In the case of a pension plan that provided target benefits but for which one or more of the criteria specified in subsection 39.2 (1) of the Act are no longer satisfied, the administrator shall do the following within 60 days after the criteria are no longer satisfied:

1. Give written notice to each member, former member and retired member which contains the following information:

i. The name and provincial registration number of the plan.

ii. The name and contact information for the administrator.

iii. A statement that the benefits provided by the plan are no longer target benefits and an explanation of how that could affect benefits.

2. File a copy of the notice required by paragraph 1 with the Chief Executive Officer and give a copy to every employer who makes contributions to the plan and to every trade union or other association described in subsection 81.0.2 (9) of the Act.

(2) The notice required by paragraph 1 of subsection (1) is not required to be sent to any member, former member or retired member who is entitled only to defined contribution benefits.

31. (1) Paragraph 1 of subsection 47.9 (4) of the Regulation is amended by striking out “Clause (c) of the definition” at the beginning and substituting “Subclause (a) (iii) of the definition”.

(2) Paragraph 1 of subsection 47.9 (6) of the Regulation is amended by striking out “Clause (b) of the definition” at the beginning and substituting “Subclause (a) (ii) of the definition”.

32. Subsection 76 (2.1) of the Regulation is amended by striking out “where all the pension benefits” and substituting “if all the pension benefits”.

33. (1) Subsection 77 (1) of the Regulation is amended by striking out “that provides defined benefits”.

(2) Section 77 of the Regulation is amended by adding the following subsection:

(1.1) Subsection (1) does not apply with respect to a pension plan if all the pension benefits provided under the plan are defined contribution benefits.

34. Section 78.1 of the Regulation is amended by striking out “where all the pension benefits” and substituting “if all the pension benefits”.

35. (1) Subsection 1 (1) of Schedule 1.1 to the Regulation is amended by adding the following paragraph:

7. A person who is entitled to make a transfer under clause 42 (1) (b) of the Act by exercising their entitlement under paragraph 2 of subsection 73 (2) of the Act.

(2) Section 8 of Schedule 1.1 to the Regulation is amended by adding the following subsection:

(3.2) Despite subsection (2.1), if the assets are transferred into the receiving fund under subsection 21 (2) of this Regulation, the owner cannot make a withdrawal or transfer described in subsection (2.1).

Commencement

36. This Regulation comes into force on the later of the day section 17 of Schedule 33 to the Stronger, Fairer Ontario Act (Budget Measures), 2017 comes into force and the day this Regulation is filed.