Defined Benefit Plans - Funding

The process by which The Pension Benefits Act, 1992 ensures the orderly funding of defined benefit plans is described in various sections of the legislation, but can be summarized as follows:

1. the plan's actuary must review the plan's financial position and prepare an actuarial valuation describing the funding needs of the plan;
2. the employer is then responsible for remitting contributions on the basis of the valuation and in a manner required by legislation; and 
3. the filing of an annual information return describing the funding that has occurred allows the Superintendent of Pensions to ensure that contributions are being made in accordance with the valuation.  

A "defined benefit provision" means a provision of a plan pursuant to which benefits are determined in any way other than solely by reference to what is provided by contributions made by or for the credit of a member together with interest. A "defined benefit plan" means a plan that contains a defined benefit provision.

The Actuarial Assumptions describes expectations regarding margins in the assumptions used in actuarial valuations.  Learn more about the Administration of Transfer Deficiencies.