R-15.1, r. 6.1.01 - Regulation respecting target-benefit pension plans in certain pulp and paper sector enterprises

Updated to 6 November 2013

This document has official status.

chapter R-15.1, r. 6.1.01

Regulation respecting target-benefit pension plans in certain pulp and paper sector enterprises

Supplemental Pension Plans Act

(chapter R-15.1, s. 2, 2nd and 3rd pars.).

Act to provide for the establishment of target-benefit pension plans in certain pulp and paper sector enterprises

(2012, chapter 32).

DIVISION 1 AFFECTED ENTERPRISES

1. A target-benefit pension plan can be established in an enterprise covered by the Act to provide for the establishment of target-benefit pension plans in certain pulp and paper sector enterprises (2012, chapter 32) where the conditions referred to in paragraphs 2 and 3 of section 1 of that Act are met between 30 December 2010 and 1 January 2014.

O.C. 1052-2013, s. 1.

DIVISION 2 ESTABLISHMENT AND EFFECTIVE DATE OF THE PLAN

2. A target-benefit pension plan may be established with regard to service affected by a component of a pension plan established in application of a regulation made pursuant to section 2 of the Supplemental Pension Plans Act (chapter R-15.1). It may be established as part of that pension plan or as a separate pension plan.

The target-benefit pension plan is effective as of the date on which the component is established.

O.C. 1052-2013, s. 2.

3. A pension plan established under this Regulation is said to be a “target-benefit pension plan”.

The provisions of the Supplemental Pension Plans Act (chapter R-15.1) apply to the target-benefit pension plan, except to the extent provided for under this Regulation. Moreover, in the case of a discrepancy, the provisions of this Regulation prevail over those of the Act.

O.C. 1052-2013, s. 3.

4. Where the target-benefit pension plan is established as a component of a pension plan, the provisions of this Regulation apply solely to the component, unless otherwise indicated, as though it were a separate pension plan. The provisions of a regulation referred to in the first paragraph of section 2, under which section the component is constituted, continue to apply thereto.

O.C. 1052-2013, s. 4.

DIVISION 3 CHARACTERISTICS

5. A target-benefit pension plan established under this Regulation must include the following characteristics:

(1)  the employer and member contributions as well as the method used for calculating those contributions are determined in advance;

(2)  the plan text determines the benefits target, including any ancillary benefit, on the basis of which the current service contribution is established;

(3)  the normal pension may vary according to the financial situation of the pension plan, as can any ancillary benefit provided for under the plan; the same variation being described in the actuarial valuation report for the plan;

(4)  notwithstanding section 39 of the Act, the employer contribution to the plan is limited to the one set out in the plan text;

(5)  the cost of the plan’s obligations, after deducting the employer contribution set out in the plan text, is charged solely to the members and beneficiaries of the plan, under the conditions provided for in section 27;

(6)  only the members and beneficiaries are entitled to surplus assets during the existence of the plan, as in the case of its termination;

(7)  the plan has no defined contribution provision nor provisions that, under a defined benefit plan, are identical to those of a defined contribution plan.

O.C. 1052-2013, s. 5.

6. A target-benefit plan constitutes, for the purposes of the Act, a defined benefit plan.

O.C. 1052-2013, s. 6.

DIVISION 4 FUNDING

§ 1 . — General

7. Notwithstanding section 42.1 of the Act, the employer may not exempt itself from the contributions it must pay by means of letter of credit nor may it exempt itself by the allocation of the surplus assets in whole or in part.

O.C. 1052-2013, s. 7.

8. The cost of the plan’s obligations as at the date of an actuarial valuation is equal to the sum of the following:

(1)  the current service contribution determined in accordance with section 138 of the Act;

(2)  the greater of the following amounts: the amortization payment determined in respect of the funding actuarial deficiency or the amortization payment determined in respect of the technical actuarial deficiency.

O.C. 1052-2013, s. 8.

9. At the date of an actuarial valuation of a target-benefit pension plan, the amortization payments related to any technical actuarial deficiency determined on the date of a previous actuarial valuation, where applicable, are eliminated.

The amortization period for such a technical actuarial deficiency ends, notwithstanding paragraph 1 of section 142 of the Act, no later than 10 years after the date of the actuarial valuation that determines the deficiency.

O.C. 1052-2013, s. 9.

10. No improvement unfunded actuarial liability may be determined with respect to a target-benefit pension plan.

O.C. 1052-2013, s. 10.

11. The value of the obligations arising from a target-benefit pension plan for credited service completed during the current fiscal year of the plan is determined based on the benefits target provided for under the plan.

O.C. 1052-2013, s. 11.

12. A portion of the contributions made to the plan may be allocated to establishing the reserve referred to in section 128 of the Act.

O.C. 1052-2013, s. 12.

13. The target-benefit pension plan may not provide for the payment of additional voluntary contributions nor may it allow any sums to be transferred to its fund from any other pension plan, even one not referred to in the Act.

O.C. 1052-2013, s. 13.

14. The maximum set in section 60 of the Act does not apply to member contributions to a target-benefit plan.

The provisions of section 60.1 of the Act do not apply to a target-benefit pension plan.

O.C. 1052-2013, s. 14.

15. The provision for adverse deviations, notwithstanding the regulatory provisions made under section 128 of the Act, is the one provided for under the target-benefit pension plan. It may not be less than 20% of the liabilities of the plan determined on a solvency basis.

Despite the foregoing, to determine the maximum amount of surplus assets that may be allocated, in application of the second paragraph of section 30, to the restoration of benefits that were reduced, the provision for adverse deviations provided for under the plan is reduced by 50%.

O.C. 1052-2013, s. 15.

§ 2 . — Conditions for payment of benefits

16. Notwithstanding the second paragraph of section 118 of the Act, any actuarial valuation of a target-benefit pension plan must be complete.

O.C. 1052-2013, s. 16.