Office of the Superintendent of Financial Institutions Canada
DIRECTIVES
OF THE SUPERINTENDENT
PURSUANT TO THE
PENSION BENEFITS STANDARDS ACT,1985
1. In these directives "Regulations", when used alone, means the Pension Benefits Standards Regulations, 1985
2. The actuarial reports referred to in subsection 12(3) of the Act shall be prepared,
(a) in the case of a plan established before January 1, 1987 as of a date not later than three years after the date as of which the most recent actuarial report was prepared pursuant to the Pension Benefits Standards Regulations, and thereafter at intervals not exceeding three years,
(b) in the case of a plan established on or after January 1, 1987 as of the effective date of the plan and thereafter at intervals not exceeding three years, and
(c) as of the effective date of an amendment to the plan which alters the cost of benefits provided under the plan.
3.
(1) For the purposes of subsection 9(1) of the Regulations the administrator of a pension plan shall cause a valuation to be performed and an actuarial report to be prepared by an actuary to determine the solvency position of the fund as of a date,
(a) within the period from June 30, 1986 to July 1, 1987, or
(b) within such longer period as the Superintendent may on application allow, and thereafter as of the date determined in accordance with paragraph 2(a), (b) or (c) of these directives.
(2) In the case of a pension plan described in subsections 44(1) and (2) of the Act the valuation performed in accordance with paragraph 3(1)(a) or (b) shall be performed as of the relevant date specified in these subsections of the Act.
4. The list of assets referred to in paragraph 15(1)(a) of the Regulations shall be prepared as of the end of each plan year.
5. The auditor's report on the financial statements of the plan referred to in paragraph 15(1)(c) of the Regulations shall be prepared as of the end to each plan year.
6. The documents referred to in sections 2, 3, 4 and 5 of these directives shall be filed with the Superintendent within six months of the date of preparation, or, in the case of the documents referred to in sections 2 and 3 of these directives, within such longer period as the Superintendent may on application allow.
7.
(1) For the purposes of paragraph 19(2)(a) of the Act the interest rate to be used from time to time shall be a rate equal to or greater than the average of the yields of the 5 year personal fixed term chartered bank deposit rate (CANSIM Series B-14045), over a reasonably recent period, the averaging period not to exceed twelve months.
(2) Interest shall be credited on contributions of a member at least once in every plan year.
(3) Interest shall commence to accrue on contributions of a member for a given month from no later than the end of the month following the month in which the contributions were made.
(4) In the case of retirement, interest shall accrue to at least the beginning of the month in which the pension benefit commences.
(5) In the case of cessation of membership, interest shall accrue to at least the beginning of the month in which contributions are returned, a transfer is made, or a deferred benefit is calculated, whichever event is latest.
(6) in the case of death, interest shall accrue to at least the beginning of the month in which a survivor pension commences, contributions are returned or a transfer is made, as the case may be.
(7) With respect to subsections (4), (5) and (6), interest may be
(a) calculated in accordance with subsection (1), or
(b) based on the interest rate calculated for the plan year preceding the date of retirement, cessation of membership or death except that, if paragraph (b) is used and the plan year preceding the date of retirement, cessation of membership or death includes a period of time prior to January 1, 1987, then any interest rate used for the purpose of applying paragraph (b) in respect of that period of time shall be based on the five year personal fixed term chartered bank deposit rate referred to in subsection (1), and not the rate actually credited under the plan.
8. For the purposes of subsection 23(4) of the Act a pension benefit shall not be offset by a benefit from a group life insurance plan in an amount greater than the group life insurance benefit times the ratio of the employer-paid cost of the policy to the total cost of the policy for the class of employees, taking into account in both the numerator and denominator of the ratio any experience or other refunds to the employer, with such ratio averaged over a period not exceeding five years.
9.
(1) The transfer value of a pension benefit credit shall be calculated by multiplying the pension benefit credit, determined in accordance with subsections 18(1) and (2) of the Regulations, by the solvency ratio of the plan as defined in section 2 of the Regulations.
(2) The transfer deficiency of a pension benefit credit shall be the amount, if any, by which the pension benefit credit exceeds the transfer value of that credit.
(3) Where a plan has a solvency ratio that is less than one, the full value of the pension benefit credit may be transferred where
(a) the administrator of the plan is satisfied that an amount equal to the transfer deficiency has been remitted to the fund, or
(b) the transfer deficiency for any individual transfer is less than 5% of the Year's Maximum Pensionable Earnings for that year as defined in section 2 of the Act, provided that the aggregate value of all transfer deficiencies paid since the last valuation does not exceed 5% of the assets of the plan at that time.
(4) Where the full value of the pension benefit credit is not transferred, the transfer deficiency shall be transferred on or before the earlier of
(a) the expiration of five years from the date of determination of the pension benefit credit and
(b) the date on which the solvency ratio of the plan as defined in section 2 of the Regulations is determined to be one, and shall include interest calculated in accordance with subsection 7(1) of these directives.
(5) Notwithstanding a solvency ratio less than one, or a solvency ratio equal to one which would become less than one upon transfer of one or more pension benefit credits, the full pension benefit credit may be transferred from one plan to another pursuant to a written transfer agreement between the two plans.
June 30, 1987