His Excellency the Governor General in Council, on the recommendation of the Minister of Finance, pursuant to subsection 9(1) a, paragraphs 10.1(2)(c) b and (d) b, subparagraphs 28(1)(b)(iv) and (b.1)(ii) c, subsection 29(6) d and section 39 e of the Pension Benefits Standards Act, 1985 f, makes the annexed Air Canada Pension Plan Funding Regulations, 2014. S.C. 2010, c. 12, s. 1793(1) S.C. 2010, c. 12, s. 1797 S.C. 2010, c. 12, s. 1815(2) S.C. 2010, c. 12, s. 1816(4) S.C. 2012, c. 16, s. 89 R.S., c. 32 (2nd Supp.)
Interpretation
The following definitions apply in these Regulations.
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 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)
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
These Regulations apply in respect of all Air Canada pension plans.
Application of the Pension Benefits Standards Regulations, 1985
Unless otherwise specified, these Regulations do not have the effect of rendering the Pension Benefits Standards Regulations, 1985 inapplicable.
However, section 9 of the Pension Benefits Standards Regulations, 1985, with the exception of subsection 9(14), does not apply in respect of Air Canada pension plans.
For the purposes of subsection 9(14) of the Pension Benefits Standards Regulations, 1985, a reference to special payment includes a reference to the amount required to be paid in accordance with paragraph 5(1)(b).
For greater certainty, the amounts required to be paid in accordance with paragraph 5(1)(b) are “other payments” for the purposes of paragraph 10(2)(d) of the Pension Benefits Standards Regulations, 1985.
Funding
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.
Every plan must be funded in each plan year by
contributions that are equal to the normal cost of the plan;
the amount that is determined under subsection (2); and
the amount that is required to be paid by an employer under a defined contribution provision in that plan.
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
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
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.
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
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
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.
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.
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.
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.
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
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
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.
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.
Solvency Ratio Level
Section 9.3 of the Pension Benefits Standards Regulations, 1985, with the exception of subsection 9.3(2), does not apply in respect of an Air Canada pension plan.
For the purposes of paragraphs 10.1(2)(c) and (d) of the Act, the prescribed solvency ratio level is 1.0.
Plan Termination
If the whole of an Air Canada pension plan is terminated, the special payment referred to in paragraph 29(6)(b) of the Act that is due on termination is equal to the sum of, in the absence of termination, the amount that would have been required to be paid to the plan in accordance with paragraph 5(1)(b) for the period beginning on the day on which the plan is terminated and ending on the last day of the plan year in which it is terminated and the amount that would have been determined in accordance with subsection 5(4).
The amount of the solvency deficiency and solvency liabilities of the plan and the aggregate amount of the solvency deficiencies and solvency liabilities of all plans that are to be used to determine the amount referred to in subsection (1) are the last amounts determined before the termination.
Rights to Information
The following information is prescribed for the purposes of subparagraph 28(1)(b)(iv) of the Act, in addition to the information referred to in section 23 of the Pension Benefits Standards Regulations, 1985:
the amount of the plan’s solvency deficiency as shown in the last actuarial report filed with the Superintendent;
the fact that the plan is being funded in accordance with these Regulations;
the amount of payments, other than the normal cost, that were required to be paid to the plan during the plan year covered by the statement; and
the amount of special payments that would have been paid to the plan for the plan year covered by the statement if the plan had been funded in accordance with section 9 of the Pension Benefits Standards Regulations, 1985 during that plan year.
The statement referred to in paragraph 28(1)(b.1) of the Act must be mailed to the former member of the plan and either to that former member’s spouse, or if the former member is cohabiting with a common-law partner, to that common-law partner rather than the former member’s spouse, whose names and addresses are shown on the records of the administrator.
Transitional Provision
For greater certainty, any amounts that were required to be paid under the Air Canada Pension Plan Funding Regulations, 2009 and have not yet been paid continue to be required until they are paid and subsections 9(14) and 10(2) of the Pension Benefits Standards Regulations, 1985 continue to apply in respect of those amounts.
Consequential Amendment to the Pension Benefits Standards Regulations, 1985
[Amendment]
Cease To Be in Force
Repeal
[Repeal]
Coming into Force
These Regulations come into force on January 1, 2014.