Pension Plan Administrators
Defined Benefit Plans - 2015 Solvency Relief
On May 1, 2015, The Pension Benefits Regulations, 1993 (“Regulations”) were amended to allow certain negotiated cost defined benefit pension plan (“NCPP”) administrators (“eligible plan administrator”) to file an election for a four year period from funding a solvency deficiency established in an actuarial valuation of a plan with a review date between and including December 31, 2012 and December 31, 2014 (“Relief”).
The Relief provides plan sponsors with time to consider options aimed at ensuring the long term viability of the plan. The time should be used to think strategically and act accordingly. In addition, the Relief provides FCAA with time to complete a review of the regulatory framework for NCPPs, and make a recommendation to the Government regarding new permanent funding rules for NCPPs.
The Relief is provided to afford stability to pension benefits and funding requirements during the time of FCAA’s review of the permanent NCPP framework. Note that contributions may still have to be increased and/or benefits reduced if the negotiated contributions rates under the NCPP continue to be unable able to meet the funding tests.
See the related documents below for more information on the 2015 temporary solvency deficiency payment relief for certain negotiated cost pension plans.