86. A pension plan may, subject to section 85, be amended so that the pension of each of the members and beneficiaries is adjusted according to the Consumer Price Index for Canada; that adjustment cannot be less than 0% or greater than 4%. The conditions under which such a provision may be applied must be provided for under the plan.
However, where the pension plan under which retirees’ pensions are insured and the assumption thereunder for indexation of the pensions of the aggregate benefits of the members and beneficiaries of the plan is made on the basis of funding based on indexation of the pensions until retirement, the first paragraph applies only to the benefits of the non-retired members.
The amendment provided for in the first and second paragraphs may not come into force on a date prior to the date of the last actuarial valuation of the whole plan or more than one year later than the date of that valuation.
The adjustment to the benefits of the members and beneficiaries that is provided for under the plan must be carried out in its entirety before the surplus assets are used for:
(1) any amendment increasing the benefits of the members and beneficiaries;
(2) any allocation of a portion of the surplus to the payment of member contributions.
Where applicable, the plan must remain fully funded and solvent so that the surplus assets may be used for such purposes.
The second paragraph of section 5 of the Act notwithstanding, no amendment may be made to the plan unless in conformity with the provisions of this section.
O.C. 159-2007, s. 5; 833-2017O.C. 833-2017, s. 1411.