18. (1) The administrator of a plan of a Crown Corporation with an initial solvency deficiency that is funded in accordance with this Part shall not have to comply with subsection 6(2) and sections 8 and 10 if the administrator files the following documents and information with the Superintendent:
(a) the actuarial report valuing the plan as of the day on which the initial solvency deficiency emerged;
(b) a written statement confirming that a resolution of the board of directors of the Crown Corporation has been passed authorizing the special payment schedule calculated in accordance with this Part;
(c) a written statement confirming that the board of directors of the Crown Corporation has notified the Minister and the Minister responsible for the Crown Corporation of the decision that the initial solvency deficiency is to be funded in accordance with this Part; and
(d) a copy of letters from the Minister and the Minister responsible for the Crown Corporation acknowledging that they have been informed of the fact that the Crown Corporation intends to fund the initial solvency deficiency in accordance with this Part.
(2) When the administrator provides the written statement under paragraph 28(1)(b) of the Act, the administrator shall also indicate the amount of the initial solvency deficiency and that the deficiency is to be funded in accordance with this Part by equal annual payments over a period not exceeding 10 years.
(3) Section 11 shall not apply in respect of a plan if the documents and information set out in subsection (1) are filed with the Superintendent.
10-YEAR FUNDING WITH LETTERS OF CREDIT
General Funding Rules
18.1 For the purposes of this Part,
(a) despite paragraph 9(4)(c) of the Pension Benefits Standards Regulations, 1985, if there is a solvency deficiency, a plan shall be funded 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 — other than those referred to in paragraph 27(1)(c) — that are payable during the plan year; and
(b) “unfunded liability” means
(i) the going concern deficit of a plan as determined on the date that the plan was established;
(ii) the amount by which an increase in the going concern liabilities of a plan resulting from an amendment to the plan exceeds the going concern excess of the plan as determined on the day before the effective date of the amendment; or
(iii) the amount by which the going concern deficit of a plan determined at the valuation date exceeds the sum of
(A) the present value of going concern special payments established in respect of periods after the valuation date, and
(B) the present value of special payments referred to in paragraph 27(1)(b).
- SOR/2010-149, s. 12.
19. (1) Despite subsection 9(4) of the Pension Benefits Standards Regulations, 1985, an initial solvency deficiency of a plan may be funded by special payments sufficient to liquidate the initial solvency deficiency by equal annual payments over a period not exceeding 10 years from the day on which the initial solvency deficiency emerged.
(2) The initial solvency deficiency may be funded in accordance with this Part if the employer
(a) obtains letters of credit for each of the first five plan years of funding under this Part, for the amount representing the difference between the present value, at the end of each plan year, of the remaining special payments under this Part and the present value of the remaining special payments that would have been required to be made to liquidate the initial solvency deficiency as if it had been funded under Part 1; and
(b) maintains letters of credit for the sixth plan year of funding and for each plan year after that year, representing the present value at the beginning of each plan year of the remaining special payments under this Part.
(3) The present value of the remaining special payments shall be determined by using the interest rate that was assumed in valuing the liabilities of the plan for the purpose of calculating the initial solvency deficiency.
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