Air Canada Pension Plan Funding Regulations, 2014 (SOR/2013-244)

Regulations are current to 2017-11-20 and last amended on 2014-01-01. Previous Versions

Air Canada Pension Plan Funding Regulations, 2014

SOR/2013-244

PENSION BENEFITS STANDARDS ACT, 1985

Registration 2013-12-13

Air Canada Pension Plan Funding Regulations, 2014

P.C. 2013-1367 2013-12-12

His Excellency the Governor General in Council, on the recommendation of the Minister of Finance, pursuant to subsection 9(1)Footnote a, paragraphs 10.1(2)(c)Footnote b and (d)Footnote b, subparagraphs 28(1)(b)(iv) and (b.1)(ii)Footnote c, subsection 29(6)Footnote d and section 39Footnote e of the Pension Benefits Standards Act, 1985Footnote f, makes the annexed Air Canada Pension Plan Funding Regulations, 2014.

Interpretation

Marginal note:Definitions
  •  (1) The following definitions apply in these Regulations.

    Air Canada pension plan or plan

    régime de pension d’Air Canada ou régime

    Air Canada pension plan or plan means a defined benefit plan administered by Air Canada that was established before May 2, 2013, excluding a multi-employer pension plan. (régime de pension d’Air Canada ou régime)

    solvency deficiency

    déficit de solvabilité

    solvency deficiency means the amount by which the solvency liabilities of a plan that are determined by means of a solvency valuation of the plan, exceed the aggregate of the market value of the assets of the plan related to the defined benefit provisions that is determined by means of the solvency valuation of the plan. (déficit de solvabilité)

  • Marginal note:Interpretation

    (2) Except as otherwise provided in these Regulations, words and expressions used in these Regulations have the same meaning as in the Pension Benefits Standards Regulations, 1985.

Application

Marginal note:Air Canada pension plans

 These Regulations apply in respect of all Air Canada pension plans.

Application of the Pension Benefits Standards Regulations, 1985

Marginal note:Continuation of application

Funding

Marginal note:Solvency standards

 The funding of any plan is considered to meet the standards for solvency if the funding is in accordance with the provisions of these Regulations.

Marginal note:Funding during each plan year
  •  (1) Every plan must be funded in each plan year by

    • (a) contributions that are equal to the normal cost of the plan;

    • (b) the amount that is determined under subsection (2); and

    • (c) the amount that is required to be paid by an employer under a defined contribution provision in that plan.

  • Marginal note:Special payment

    (2) For the purposes of paragraph (1)(b), the amount required to be paid to each plan for a plan year is equal to the amount determined

    • (a) in the case where the aggregate amount of the solvency deficiencies of all plans is equal to or greater than $150,000,000, by the formula

      A x B/C

      where

      A
      is $150,000,000,
      B
      is the amount of the solvency deficiency of the plan, and
      C
      is the aggregate amount of the solvency deficiencies of all plans; or
    • (b) in the case where the aggregate amount of the solvency deficiencies of all plans is less than $150,000,000, by the formula

      D + ($150,000,000 – E) x F/G

      where

      D
      is the amount of the solvency deficiency of the plan,
      E
      is the aggregate amount of the solvency deficiencies of all plans,
      F
      is the amount of the solvency liabilities of the plan, and
      G
      is the aggregate amount of the solvency liabilities of all plans.
  • Marginal note:Funding for 2020 plan year

    (3) Unless the whole of the pension plan is terminated or unless Air Canada provides notice in accordance with subsection 6(1), the plan must also be funded, for the 2020 plan year, by the amount that is determined under subsection (4), and that amount must be paid by December 31, 2020.

  • Marginal note:Special payment for 2020 plan year

    (4) For the purposes of subsection (3), the amount required to be paid to each plan for the plan year is equal to the amount determined

    • (a) in the case where the aggregate amount of the solvency deficiencies of all plans is equal to or greater than the amount determined by the formula set out in A, by the formula

      A x (B/C)

      where

      A
      is the amount obtained by the formula

      ($200,000,000 × D) – [($150,000,000 x D) + E]

      where

      D
      is the number of plan years that are after the 2013 plan year, and
      E
      are the amounts paid for those plan years that are in addition to the amounts required to be paid in accordance with subsection (1),
      B
      is the amount of the solvency deficiency of the plan, and
      C
      is the aggregate amount of the solvency deficiencies of all plans; or
    • (b) in the case where the aggregate amount of the solvency deficiencies of all plans is less than the amount determined by the formula set out in G, by the formula

      F + (G – H) x I/J

      where

      F
      is the amount of the solvency deficiency of the plan,
      G
      is the amount obtained by the formula

      ($200,000,000 × K) – [($150,000,000 x K) + L]

      where

      K
      is the number of plan years that are after the 2013 plan year, and
      L
      are the amounts paid for those plan years that are in addition to the amounts required to be paid in accordance with subsection (1),
      H
      is the aggregate amount of the solvency deficiencies of all plans,
      I
      is the amount of the solvency liabilities of the plan, and
      J
      is the aggregate amount of the solvency liabilities of all plans.
  • Marginal note:Interest rate

    (5) If an employer fails to make the payment to the plan that is referred to in subsection (3) within the period that is set out in that subsection, the amount that must be paid in accordance with that subsection is to bear interest at the rate that was used to determine the solvency liabilities of the plan.

Marginal note:Discontinuance of funding — notice to the Superintendent
  •  (1) If, on or before the earlier of the day on which the actuarial report is filed with the Superintendent for a plan year and June 30 of that plan year, Air Canada provides written notice to the Superintendent indicating its choice to discontinue funding of all the Air Canada pension plans under these Regulations for that plan year, these Regulations, except subsections 1(1), 3(3) and (4), this section and section 12, cease to apply to the plans on December 31 of the previous plan year.

  • Marginal note:Discontinuance of funding — notice to members and beneficiaries

    (2) Within 30 days after notice is provided in accordance with subsection (1), Air Canada must notify all plan members and beneficiaries in writing indicating that it has chosen to discontinue funding of all the Air Canada pension plans under these Regulations and indicating the plan year for which its choice will begin to apply.

  • Marginal note:Special payment — notice

    (3) Each plan must be funded for the plan year in which the notice was provided in accordance with subsection (1) by an amount that must be paid within 30 days after that notice has been provided and is equal to the amount determined

    • (a) in the case where the aggregate amount of the solvency deficiencies of all plans is equal to or greater than the amount determined by the formula set out in A, by the formula

      A × (B/C)

      where

      A
      is the amount obtained by the formula

      ($200,000,000 × D) – [($150,000,000 x D) + E]

      where

      D
      is the number of plan years that are after the 2013 plan year, excluding the year in which the notice is provided, and
      E
      are the amounts paid for those plan years that are in addition to the amounts required to be paid in accordance with subsection 5(1),
      B
      is the amount of the solvency deficiency of the plan, and
      C
      is the aggregate amount of the solvency deficiencies of all plans; or
    • (b) in the case where the aggregate amount of the solvency deficiencies of all plans is less than the amount determined by the formula set out in G, by the formula

      F + (G – H) x I/J

      where

      F
      is the amount of the solvency deficiency of the plan,
      G
      is the amount obtained by the formula

      ($200,000,000 × K) – [($150,000,000 x K) + L]

      where

      K
      is the number of plan years that are after the 2013 plan year, excluding the year in which the notice is provided, and
      L
      are the amounts paid for those plan years that are in addition to the amounts required to be paid in accordance with subsection 5(1),
      H
      is the aggregate amount of the solvency deficiencies of all plans,
      I
      is the amount of the solvency liabilities of the plan, and
      J
      is the aggregate amount of the solvency liabilities of all plans.
  • Marginal note:Interest rate

    (4) If an employer fails to make the payment to the plan that is referred to in subsection (3) within the period that is set out in that subsection, the amount that must be paid in accordance with that subsection is to bear interest at the rate that was used to determine the solvency liabilities of the plan.

  • Marginal note:Average solvency ratio

    (5) In respect of the plan year in which the notice under subsection (1) has been provided, the average solvency ratio for each plan must be adjusted by increasing the solvency assets by the amount determined under subsection (3).

 
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