Air Canada Pension Plan Solvency Deficiency Funding Regulations (SOR/2004-174)

8. (1) The initial solvency deficiency of a plan shall be calculated as if any applicable special payments referred to in paragraph 11(c) of the Protocol had been remitted to the pension fund on December 31, 2003.

(2) The solvency ratio of a plan as at January 1, 2004 shall be calculated after determining the initial solvency deficiency in accordance with subsection (1).

9. (1) The following definitions apply in this section.

“adjusted aggregate amount”

“adjusted aggregate amount” means, in respect of a plan year, the adjusted aggregate amount of annual special payments for that plan year as determined in accordance with subsection (4) or in accordance with subsections (4) and (5), as applicable. (total rajusté)

“unadjusted aggregate amount”

“unadjusted aggregate amount” means, in respect of a plan year, the unadjusted aggregate amount of annual special payments set out in the schedule for that plan year. (total non rajusté)

(2) Notwithstanding subsection 9(4) of the Pension Benefits Standards Regulations, 1985, an initial solvency deficiency of a plan shall be funded over a period not exceeding 10 years, beginning with the 2004 plan year and ending with the 2013 plan year, by an annual special payment to the pension fund in each of those years determined in accordance with subsections (3) to (5).

(3) The amount of an annual special payment in respect of a plan for a plan year shall be determined by multiplying the adjusted aggregate amount for that plan year by the ratio of the initial solvency deficiency of the plan to the aggregate amount of the initial solvency deficiencies of all of the plans.

(4) Subject to subsection (5), the adjusted aggregate amount in respect of a plan year set out in column 1 of the schedule shall be determined by multiplying the unadjusted aggregate amount set out for that plan year in column 2 by the greater of

• (a) one, and

• (b) the ratio of the aggregate amount of the initial solvency deficiencies of all of the plans to the sum of the present values, as at January 1, 2004, of each of the unadjusted aggregate amounts set out in column 2.

(5) If the adjusted aggregate amount determined in accordance with subsection (4) for the 2004 plan year is less than the result obtained by multiplying the assumed interest rate used in the valuation of the liabilities of the plans for the purpose of calculating their initial solvency deficiencies by the aggregate amount of the initial solvency deficiencies of all of those plans,

• (a) the adjusted aggregate amount for the 2004 plan year shall be an amount equal to that result; and

• (b) the adjusted aggregate amount for each of the 2006, 2007 and 2008 plan years may be reduced by an equal amount for each of those plan years such that the sum of the present values, as at January 1, 2004, of each of the adjusted aggregate amounts determined for the 10 plan years referred to in subsection (2) is the same as it would be if it were calculated without reference to paragraph (a).

(6) Air Canada shall, not later than 14 days after the expiration of the initial order, provide the Superintendent with a payment schedule setting out for each plan the amount of the annual special payment required to be made in each of the 10 plan years referred to in subsection (2) calculated in accordance with subsections (3) to (5).

(7) Notwithstanding subsection 9(14) of the Pension Benefits Standards Regulations, 1985, the annual special payment referred to in subsection (2) in respect of the 2004 plan year shall be made in two installments as follows:

• (a) the first installment, in an amount equal to 75 per cent of that annual special payment, shall be remitted not later than the later of

  • (i) October 30, 2004, and

  • (ii) 30 days after the day on which these Regulations come into force; and

• (b) the second installment, in an amount equal to 25 per cent of that annual special payment, shall be remitted not later than January 30, 2005.

(8) For greater certainty, the following special payments are not required to be paid in respect of a plan in a plan year:

• (a) any special payment required to liquidate an initial unfunded liability emerging as at January 1, 2004 that would have been required to be paid in respect of that plan year under subsection 9(3) of the Pension Benefits Standards Regulations, 1985; and

• (b) any special payment calculated in accordance with an actuarial report filed with the Superintendent before January 1, 2004 that would have been required to be paid in respect of that plan year under subsection 9(3) or (4) of the Pension Benefits Standards Regulations, 1985.