Archived Content
The following content was archived on February 22, 2019 and is provided for historical reference. Information is subject to change and may no longer be accurate.
Questions posted relate to:
Filing Deadlines and Elections
Member/Former Member Questions
Plan Administrator Questions
Use of Actuarial Gains
Filing Deadlines and Elections
Q: The administrator of a plan wishes to file a report with a valuation date on or after September 30, 2008 and before November 1, 2008. Does the usual 9-month filing deadline apply?
A: No. If the valuation date is between September 30, 2008 and October 31, 2008, the filing deadline has been extended to 10 months after the valuation date.
Q: The administrator of a plan filed a report with a valuation date on or after September 30, 2008 prior to the government’s filing of the solvency funding relief and other amendments to Regulation 909. The administrator wishes to file a report to reflect the amendments. Is there any action the administrator can take?
A: Yes, the plan can re-file its valuation report within the 9-month filing deadline. If the valuation date is between September 30, 2008 and October 31, 2008, the timeline has been extended to 10 months.
Q: If the first valuation is required as a result of a plan amendment, can a plan administrator make an election in respect of the temporary solvency relief options?
A: Yes. In order to proceed with an amendment and have a valuation report treated as a solvency relief report, the amendment should be included as part of a section 14 report.
Q: The administrator of a plan does not intend to make an election in respect of its first filed report with a valuation date on or after September 30, 2008. Can the administrator make an election in a subsequent valuation report?
A: No. An election can only be made with the first valuation report filed with a valuation date on or after September 30, 2008.
Use of Actuarial Gains
Q: The administrator of a plan has decided not to make a solvency funding relief election. Can the administrator use future solvency experience gains to reduce solvency special payments?
A: No, the gains may only be used to shorten the remaining amortization periods for existing solvency deficiencies.
Plan Administrator Questions
Q: The revised Standard of Practice for Pension Commuted Values published by the Canadian Institute of Actuaries took effect on April 1, 2009. Can the administrator of a plan use this new standard prior to that date?
A: Yes. The new standard can be used for the purpose of solvency valuations for valuation dates on or after December 12, 2008. On the other hand, the new commuted value standard cannot be used until April 1, 2009 for the purpose of determining commuted values for individual terminating members.
Q: Do the new rules for contribution holidays apply to all defined benefit plans, regardless of whether the administrator elects temporary solvency relief measures?
A: Yes. All plans that provide defined benefits are subject to the amended provisions of Regulation 909 in respect of contribution holidays. For plan fiscal years ending between June 30, 2010 and December 31, 2012, plans must make all contributions required to pay the normal cost unless an actuarial cost certificate with a valuation date at the beginning of a fiscal year is filed with the Superintendent within 90 days of the valuation date and demonstrates that the plan has sufficient funding excess to pay all or a portion of the normal cost for that year. More information is available at Contribution Holidays Questions Answered.
Q: What special payments can be consolidated in the solvency relief report?
A: Only the present value of remaining solvency special payments in respect of solvency deficiencies arising before the valuation date of the solvency relief report that remain to be paid are included in the consolidation. Pre-existing special payments in respect of going-concern unfunded liabilities and special payments required under section 75 of the PBA are not included.
Q: Can the administrator of a plan defer the funding of a prior consolidated solvency deficiency?
A: No.
Q: When do the accelerated funding rules for plan amendments end if an administrator elects both Option 2 and Option 3?
A: If both Option 2 and Option 3 are elected, the accelerated funding rules would no longer apply for plan amendments with an effective date after the later of the date the consolidated prior solvency deficiency is liquidated and the date on which the remainder of the extended liquidation period equals 5 years.
Q: What is a “jointly governed plan”?
A: “jointly governed plan” means a plan other than an excluded plan that is,
(a) a jointly sponsored pension plan,
(b) a multi-employer pension plan established pursuant to a collective agreement or a trust agreement,
(c) a plan whose administrator is a pension committee all of whose members are representatives of members of the plan, or
(d) a plan whose administrator is a pension committee described in section 8 (1) (b) of the Act if at least one-half of the members of the pension committee represent members of the plan or persons receiving pensions under the plan.
Member/Former Member Questions
Q: Who is an eligible member?
A: An eligible member is, with respect to a plan, a member whose pension benefit includes a defined benefit, other than,
(a) a member who no longer has an entitlement to any payments from the plan, and
(b) a member for whom a notice of death has been received by the administrator.
Q: Who is an eligible former member?
A: An eligible former member is, with respect to a plan, a former member whose pension or pension benefit includes a defined benefit, other than,
(a) a former member who no longer has an entitlement to any payments from the plan, and
(b) a former member for whom a notice of death has been received by the administrator.
Q: What is meant by “no longer has an entitlement to any payments from the plan”? When is it determined?
A: A former member who has received the full commuted value of a deferred pension under section 42 of the PBA prior to the day an information statement is sent and/or the day a notice of objection form is returned to the administrator is a person who “no longer has an entitlement to any payments from the plan”.
Q: As a widow of a former member of a pension plan I am a beneficiary under the plan. Am I entitled to receive enhanced notice if the plan makes an election under the solvency relief amendments?
A: No, only eligible members and eligible former members are entitled to receive enhanced notice.
Q: I am a retired member of a pension plan and have been requested by the administrator of the plan to provide my consent for the administrator to elect Option 3 – the extension of the new solvency deficiency funding period from 5 years to not more than 10 years. Can the union exercise my vote?
A: No, the union can only vote on behalf of individuals who were eligible members on the date of the solvency relief report. Eligible former members(which includes retired members) must vote directly unless they become eligible former members between the date of the solvency relief report and the date the information forms are sent.
Q: How often must defined benefit pension plans file valuation reports?
A: The PBA requires that Ontario registered pension plans fund promised benefits in accordance with standards set out in Regulation 909. Defined benefit pension plans must file actuarial valuations every three years, or annually if a plan indicates solvency concerns in an actuarial valuation report. Where these valuations show a pension plan's assets to be less than its liabilities, payments must be made into the plan to eliminate the deficiency over a prescribed period of time.
Q: What is the purpose of valuation reports?
A: Actuarial valuations of defined benefit plans are conducted using two different sets of actuarial assumptions: "solvency valuations" use assumptions consistent with a plan being terminated, while "going-concern valuations" are based on the plan continuing in operation.
If a solvency valuation reveals a shortfall of plan assets to plan liabilities, Regulation 909 requires the plan sponsor to make special payments into the plan sufficient to eliminate the deficiency over five years. Where a deficiency exists on the basis of a going-concern valuation, Regulation 909 requires special payments to eliminate the going-concern deficiency over 15 years. In general, the payments that a plan sponsor must remit to a plan in a given year include the amount necessary to cover the ongoing current service costs associated with the plan, plus any "special payments" required in that year to pay down a funding deficiency over the relevant time period.