Directives of the Superintendent pursuant to the Pension Benefits Standards Act, 1985 - Effective February 25, 2021

  1. (1) In these directives

    1. "Act"
      1. means the Pension Benefits Standards Act, 1985;
    2. "pension benefit credit"
      1. means
        1. where the benefit is subject to the Act, the pension benefit credit as defined in subsection 2(1) of the Act and determined in accordance with subsection 18(1) of the Regulations; or
        2. where the benefit is subject to provincial pension legislation, the aggregate value at a particular time of the pension benefit determined in accordance with the applicable provincial pension legislation;
    3. "Regulations"
      1. means the Pension Benefits Standards Regulations, 1985;
    4. "transfer deficiency"
      1. means the amount, if any, by which the pension benefit credit exceeds the transfer value;
    5. "transfer ratio"
      1. means
        1. the solvency ratio of the pension plan; or
        2. where the pension benefit credit is calculated in accordance with subsection 3570 of the Standards of Practice for Pension Plans of the Canadian Institute of Actuaries, 1.00;
    6. "transfer value"
      1. means the amount calculated by multiplying the pension benefit credit by the transfer ratio;

    (2) Except as where otherwise provided herein, the definitions contained in the Act and Regulations apply.

  2. The actuarial reports referred to in subsection 12(2) of the Act must be prepared,

    1. where an application for registration under subsection 10(1) of the Act is filed, as at the effective date of the pension plan,
    2. where an amendment which alters the cost of pension benefits or other benefits under the pension plan is made, as at the effective date of the amendment, and
    3. as at every plan year end, except
      1. in the case of a pension plan where the solvency ratio is 1.20 or greater, the actuarial report must be prepared as at the end of the plan year that is not later than three years after the date of the most recent actuarial report, or
      2. in the case of a pension plan that meets the definition of a designated pension plan under section 8515 of the Income Tax Regulations, the actuarial report must be prepared as at the end of the plan year that is not later than three years after the date of the most recent actuarial report.

  3. (1) Subject to subsection (2), the auditor's report of the pension fund referred to in paragraph 15(1)(c) of the Regulations must be prepared as at the end of the plan year.

    (2) An auditor's report of the pension fund that has not been established by or under a Pension Fund Society is not required to be filed if the pension fund is held as follows:

    1. all funds are held by one insurance company in any type of account, or
    2. all funds are held in the pooled funds of one trust company, or
    3. all funds are held by one trust company but not in its pooled funds and the fair market value of the total assets of the pension fund is less than $5,000,000.

  4. Pursuant to subsection 12(4) of the Act, the documents referred to in section 12 of the Act must be filed with the Superintendent,

    1. within six months after the end of the plan year, or
    2. where an application is made, within such longer period as the Superintendent may allow.

  5. Following the termination of a pension plan, the actuarial report referred to in subsection 24.1(4) of the Regulations must be prepared annually as at the anniversary of the effective date of termination and must be filed with the Superintendent within six months after the valuation date.

  6. For the purposes of paragraph 19(2)(a) of the Act, the interest rate that is fixed is the average of the yields of the 5-year personal fixed term chartered bank deposit rate (CANSIM V80691336, or its successor data series, published weekly by the Bank of Canada) using the value of the last weekly series for that month, over a reasonably recent period, the averaging period not to exceed twelve months.

  7. For the purposes of subsection 23(6) of the Act, the part of the group life insurance payment that can be considered to have been paid by employer premiums must not be greater than the amount of the group life insurance benefit multiplied by 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.

  8. (1) Pursuant to section 26.1 of the Act, and subject to subsection 8(2) of these directives, consent is given to the transfer of moneys that relate to defined benefit provisions out of the pension fund under section 26 of the Act, subject to the following terms and conditions:

    1. Except as provided in paragraph (b), the amount of the initial transfer under section 26 of the Act cannot exceed the transfer value.
    2. Where a pension plan has a transfer ratio that is less than 1.00, the full amount of the pension benefit credit may be transferred where
      1. at any time an amount equal to the transfer deficiency has been remitted to the fund, or
      2. the transfer deficiency for any individual transfer is less than 20% of the Year's Maximum Pensionable Earnings for that year, provided that the aggregate value of all pension benefit credits transferred under this subparagraph since the valuation date of the most recent actuarial report does not exceed 5% of the assets of the pension plan at the valuation date of the most recent actuarial report.
    3. Where the full amount of the pension benefit credit is not transferred, the transfer deficiency must be transferred on the earlier of:
      1. five years from the date of determination of the pension benefit credit, and
      2. the date on which, the solvency ratio of the pension plan is determined to be at least 1.00,
      with interest credited from the date of determination of the pension benefit credit to the date of transfer, at the rate of interest used in the determination of the pension benefit credit.

    (1.1) Where moneys were transferred out of the pension fund under section 26 of the Act between December 1, 2020 and the effective date of these directives, and the pension benefit credit was calculated in accordance with subsection 3570 of the Standards of Practice for Pension Plans of the Canadian Institute of Actuaries, any amount of the pension benefit credit that remains payable must be transferred forthwith with interest credited from the date of determination of the pension benefit credit to the date of transfer, at the rate of interest used in the determination of the pension benefit credit.

    (2) Where a pension plan is regulated by a province on behalf of the Superintendent under a bi-lateral or multi-lateral agreement, transfers of moneys out of the pension fund under section 26 of the Act, are subject to any transfer conditions applicable to benefits subject to the pension legislation of that province.

  9. (1) For the purposes of this section, the "solvency ratio following the purchase of the annuity" is the solvency ratio adjusted to reflect the effect on solvency assets and liabilities of the purchase of an immediate or deferred life annuity described in this section.

    (2) Pursuant to section 26.1 of the Act, where a purchase of an immediate or deferred life annuity is to be made other than for the purposes of section 26 of the Act and does not settle all the liabilities of the pension plan, consent is given to that purchase by an administrator if

    1. the solvency ratio following the purchase of the annuity is not less than 0.85; or
    2. an amount has been paid to the pension fund to maintain the solvency ratio following the purchase of the annuity at the lesser of 0.85 and the transfer ratio.
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