S-2.1.1 - Act to foster the financial health and sustainability of municipal defined benefit pension plans

Section 20 Disposition versions

2014-12-05

20. The surplus assets cannot be allocated to the payment of contributions, unless a fiscal rule so requires. The surplus assets must be used separately with respect to service subsequent to 31 December 2013 and to service ending on that date.

For service ending on 31 December 2013, the surplus assets must first be allocated to resuming indexation of the pensions of the members who are retired on 31 December 2013 in accordance with the third and fourth paragraphs of section 16. Once such indexation has resumed, the surplus assets must first be used to constitute a provision equal to the value of the suspended indexation in order to pay an indexation of the pension of the same retired members following subsequent actuarial valuations.

Then, unless the municipal body and the active members have agreed on a different participation and a different order, the surplus assets must be used for the following purposes and in the following order:

(1)  constituting a provision in order to pay an ad hoc indexation to active members, if such an indexation was agreed on under section 13;

(2)  reimbursing the debts contracted by the pension plan toward the municipal body and the members as at 31 December 2013; and

(3)  funding improvements to the pension plan other than an indexation of the pension.

Unless the municipal body and the active members have agreed on a different distribution and a different order, the surplus assets must, with respect to service subsequent to 31 December 2013, be used for the following purposes and in the following order:

(1)  paying into the stabilization fund the amounts required, if an ad hoc indexation of pensions with respect to the members has been agreed on; and

(2)  funding improvements to the pension plan.

2014, c. 15, s. 20.