Solvency Funding Relief Regulations

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The Solvency Funding Relief Regulations are made under the Pension Benefits Standards Act, 1985. The regulations provide relief to pension plans that have a solvency deficiency and allow for special payments to be made to fund the plan.

These Regulations apply to defined benefit plans, except as otherwise provided. The Regulations define initial solvency deficiency and calculate it in accordance with the definition of solvency deficiency in subsection 9(1) of the Pension Benefits Standards Regulations, 1985.

The Regulations set out new five-year and ten-year funding rules for pension plans with solvency deficiencies.

Plans may be funded under these Regulations if all of the payments that are owed to the pension fund before the day on which the initial solvency deficiency emerges have been made as of the filing date of the actuarial report that shows the emergence of that initial solvency deficiency.

The Regulations provide for special payments to be made in each plan year by annual solvency special payments equal to the amount by which the solvency deficiency divided by 5 exceeds the amount of going concern special payments during the plan year.

These Regulations apply to multi-employer pension plans, and an initial solvency deficiency may be funded in accordance with Part 1 if less than one third of the members and less than one third of the beneficiaries excluding members object.

The administrator shall provide certain information to the beneficiaries, including a description of the extent to which the beneficiaries' benefits would be reduced if the plan were fully terminated and wound up.

The Regulations require the administrator to file certain documents with the Superintendent, including written notifications and actuarial reports.