Acts and Regulations

2012-75 - Shared Risk Plans

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Document at 19 May 2014
NEW BRUNSWICK
REGULATION 2012-75
under the
Pension Benefits Act
(O.C. 2012-251)
Filed August 14, 2012
Under sections 100 and 100.9 of the Pension Benefits Act, the Lieutenant-Governor in Council makes the following Regulation:
Citation
1This Regulation may be cited as the Shared Risk Plans Regulation - Pension Benefits Act.
Definitions for this Regulation
2The following definitions apply in this Regulation.
“Act” means the Pension Benefits Act.(Loi)
“benefit improvement” means an escalated adjustment for past periods or an increase in other ancillary benefits allowed under the funding policy.(bonification de la prestation)
“Consumer Price Index” means Consumer Price Index as defined in subsection 8500(1) of the Income Tax Regulations (Canada).(indice des prix à la consommation)
“contribution adjustment” means the amount by which the administrator is authorized to increase or reduce contributions under the funding policy.(rajustement des cotisations)
“funding policy liabilities” means the actuarial present value of the past base benefits and past ancillary benefits stated in the plan text, excluding any escalated adjustments that do not form part of the base benefits, determined in accordance with the requirements of subsection 14(7) and the assumptions provided for in the funding policy.(passif de la politique de financement)
“funding policy normal cost” means the normal cost in respect of the base benefits and ancillary benefits stated in the plan text, excluding any escalated adjustments that do not form part of the base benefits, determined in accordance with the requirements of subsection 14(7) and the assumptions provided for in the funding policy.(coût d’exercice de la politique de financement)
“future ancillary benefits” means ancillary benefits for service rendered after the relevant date.(prestations accessoires futures)
“future base benefits” means base benefits for service rendered after the relevant date.(prestations de base futures)
“initial contributions” means the contributions referred to in subsection 9(1).(cotisations initiales)
“open group funded ratio” means the 15 year open group funded ratio calculated under paragraph 14(6)(f).(coefficient de capitalisation du groupe avec entrants)
“past ancillary benefits” means ancillary benefits for service rendered on or before the relevant date.(prestations accessoires antérieures)
“past base benefits” means base benefits for service rendered on or before the relevant date.(prestations de base antérieures)
“permanent benefit change” means a change that is intended to permanently change the formula for the calculation of the base benefits or ancillary benefits after the date of the change, including a change made in accordance with the funding excess utilization plan.(changement permanent de la prestation)
“Regulation 91-195” means New Brunswick Regulation 91-195 under the Act.(Règlement 91-195)
“temporary contributions” means the amount of contributions used to deal with a deficit existing at the relevant date and applied for a fixed period not exceeding 15 years or until a particular risk management goal under the funding policy is reached, whichever occurs first.(cotisations temporaires)
“termination value funded ratio” means the termination value funded ratio calculated under paragraph 14(6)(e).(coefficient de capitalisation de la valeur de terminaison)
“valuation date” means the review date of an actuarial valuation report.(date d’évaluation)
Definitions for Part 2 of the Act
3The following definitions apply in Part 2 of the Act.
“contingent indexing” means the escalated adjustments that may be provided under a shared risk plan based on the funding policy and the funded status of the plan at the relevant date.(indexation conditionnelle)
“defined contribution plan” means defined contribution plan as defined in section 2 of Regulation 91-195.(régime à cotisation déterminée)
Definitions for Part 2 of the Act and this Regulation
4The following definitions apply in Part 2 of the Act and in this Regulation.
“actuarial valuation report” means a report that is prepared by an actuary in a manner that is consistent with the Standards of Practice, as amended from time to time, adopted by the Canadian Institute of Actuaries and that contains the actuary’s statement of opinion and the information required under the shared risk plan, the Act and the regulations respecting a going concern valuation and a funding policy valuation.(rapport d’évaluation actuarielle)
“defined benefit plan” means defined benefit plan as defined in section 2 of Regulation 91-195.(régime de prestation déterminée)
“escalated adjustment” means escalated adjustment as defined in section 2 of Regulation 91-195.(rajustement actualisé)
Base benefits
5(1)A shared risk plan may provide the following base benefits
(a) a pension paid to former members for their lifetime or payable to members at the normal retirement date and for their lifetime;
(b) escalated adjustments applied to the pension for past periods up to the relevant date, including those paid or payable to members and former members; and
(c) vested ancillary benefits at the relevant date, including those paid or payable to former members who have terminated employment or retired.
5(2)If escalated adjustments are granted or ancillary benefits are vested, they become part of the base benefits.
Funding policy
6(1)The objective of the funding policy of a shared risk plan is to provide the rules under which the administrator is required to manage the contributions and benefits under the plan.
6(2)The funding policy shall contain the following:
(a) the risk management goals in accordance with section 7;
(b) the risk management procedures in accordance with section 8;
(c) the contributions in accordance with section 9;
(d) the circumstances under which contributions may be suspended;
(e) a funding deficit recovery plan in accordance with section 11;
(f) a funding excess utilization plan in accordance with section 12;
(g) a description of the cost sharing between the employer and the members;
(h) a description of who is responsible for paying the expenses relating to the administration of the shared risk plan and how those expenses are treated for the purposes of the risk management procedures referred to in section 8; and
(i) the actuarial assumptions used on the conversion of a pension plan to a shared risk plan and the process for changing the assumptions over time, including the discount rate used to calculate the funding policy liabilities of the shared risk plan.
6(3)The discount rate referred to in paragraph (2)(i) shall be
(a) consistent with the purposes of the shared risk plan, the funding policy, the investment policy and the risk management goals and procedures, and
(b) held constant for the first two actuarial valuation reports filed after the conversion of a pension plan to a shared risk plan or after the plan is established if the shared risk plan is new.
Risk management goals
7(1)The primary risk management goal of a shared risk plan shall be that there is at least a 97.5% probability that the past base benefits at the end of each year will not be reduced over a 20 year period after taking into account the following:
(a) the funding deficit recovery plan, other than the reduction of base benefits; and
(b) the funding excess utilization plan, other than permanent benefit changes.
7(2)The primary risk management goal referred to in subsection (1) shall be met:
(a) at the date a shared risk plan is established;
(b) at the date a pension plan is converted to a shared risk plan;
(c) at the date a permanent benefit change is made;
(d) at the date a benefit improvement is made;
(e) at the date cumulative increases or cumulative decreases occurring as a result of a change to the funding policy exceed the amount determined under subsection 9(8); and
(f) at the date temporary contributions are reduced or removed if that date is before the expiry date of the fixed period referred to in the definition “temporary contributions” in section 2.
7(3)The secondary risk management goals of a shared risk plan shall include the following:
(a) if a defined benefit plan is converted to a shared risk plan and
(i) the defined benefit plan had a final average salary formula, the expected escalated adjustment of the base benefits for service rendered on or before the conversion date and resulting from the application of the risk management procedures under section 8 shall, on average over a 20 year period, exceed 75% of the increase in the Consumer Price Index; or
(ii) the defined benefit plan provided escalated adjustments after retirement or after termination of employment if a former member is entitled to a deferred pension, the expected escalated adjustment of the base benefits for service rendered on or before the conversion date and resulting from the application of the risk management procedures under section 8 shall, on average over a 20 year period, exceed 75% of the escalated adjustments specified in the pension plan immediately before it was converted to a shared risk plan; and
(b) with respect to any other ancillary benefits provided under a shared risk plan, the amount of ancillary benefits that are expected to be provided and that result from the application of the risk management procedures under section 8 shall, on average over a 20 year period, exceed 75% of the value of the ancillary benefits specified in the plan text.
7(4)The secondary risk management goals referred to in subsection (3) shall be met:
(a) at the date a pension plan is converted to a shared risk plan; and
(b) at the date a permanent benefit change is made.
7(5)A test of the position of a shared risk plan relative to the primary risk management goal referred to in subsection (1) shall be conducted each year.
Risk management procedures
8(1)The risk management procedures for a shared risk plan shall include the following:
(a) an asset liability model in accordance with section 15; and
(b) economic assumptions in accordance with paragraph 15(2)(a).
8(2)The risk management procedures shall be sufficient to test that the risk management goals may be met, and the administrator shall determine whether additional tests are required taking into account the current economic environment and other relevant factors.
8(3)If the Superintendent considers it appropriate, he or she may require the administrator to perform additional tests at any time.
Contributions
9(1)Subject to subsections (10) and (11), the initial contributions, including the portion paid by the employer and the members required to make contributions, shall be determined at the times referred to in subsection (2) taking into account the following:
(a) the funding policy normal cost;
(b) the portion of the normal expenses relating to the administration of the shared risk plan, including the amount of the expenses that pertain to investment and that exceed 0.50% of the pension fund; and
(c) an additional amount so that the risk management goals referred to in section 7 are met.
9(2)The times for the purposes of subsection (1) are when a shared risk plan is established and when a permanent benefit change is made, other than a change allowed under the funding policy.
9(3)The amount of the initial contributions shall be the same amount for each year and shall be a fixed dollar amount or a fixed percentage of the earnings in respect of which contributions are made unless later changed as a result of a permanent benefit change that is approved by
(a) the employer or employers required to make contributions under the plan, and
(b) the trade union that represents the members of the plan if the change is approved as a result of collective bargaining.
9(4)If a shared risk plan allows for temporary contributions, it shall specify the amount of the temporary contributions, the portion paid by the members and the period over which the temporary contributions will be made.
9(5)The amount of the temporary contributions shall be the same amount for each year and shall be a fixed dollar amount or a fixed percentage of the earnings in respect of which contributions are made.
9(6)Subject to the Income Tax Act (Canada), if members are required to make contributions, their share shall not exceed 50% of the total amount of contributions.
9(7)If a shared risk plan allows for contribution adjustments, they shall be made no later than 12 months after the review date of the most recent actuarial valuation report that identified a need for an increase or a reduction in contributions.
9(8)The funding policy shall not allow cumulative increases or cumulative decreases to exceed the greater of
(a) 2% of the earnings in respect of which contributions are made, and
(b) 25% of the initial contribution rate.
9(9)The initial contributions, contribution adjustments and temporary contributions shall be paid in accordance with the plan text, the funding policy and this Regulation.
9(10)Subject to subsection (11), the amount of the initial contributions shall be recalculated if a permanent benefit change is to be made.
9(11)Subsection (10) does not apply to a change contemplated in the funding policy as it existed before the permanent benefit change is considered.
9(12)If the amount of the initial contributions recalculated under subsection (10) is higher than the amount previously stated in the funding policy, the permanent benefit change shall not be made unless approved by the Superintendent and, if approved by the Superintendent, the amount of the initial contributions shall be increased to the level recalculated under subsection (10) no later than 12 months after the review date of the first actuarial valuation report that included the permanent benefit change in the funding policy liabilities.
9(13)Despite anything else in this Regulation, the total amount of the initial contributions, contribution adjustments and temporary contributions in any year shall not exceed the maximum contributions allowed under the Income Tax Act (Canada).
9(14)An employer required to make contributions under a shared risk plan or a person required to make contributions on behalf of an employer under a shared risk plan shall make contributions to the pension fund in amounts that are not less than the sum of
(a) any contributions received from members, including any amounts withheld from members by payroll deduction or otherwise as the members’ contributions under the plan and any additional voluntary contributions or optional ancillary contributions permitted under the plan, and
(b) any amounts required by the applicable plan text and funding policy to be paid by the employer or person.
9(15)Contributions made and amounts paid under subsection (14) shall be made or paid
(a) for contributions referred to in paragraph (14)(a), within 15 days after the last day of the month in which the contribution is received or the amount is withheld by the employer or person, and
(b) for amounts referred to in paragraph (14)(b), within 15 days after the last day of the month in which the period of employment giving rise to the amounts occurs.
9(16)Sections 35 to 41 of Regulation 91-195 do not apply to a shared risk plan.
Plan expenses
10The expenses relating to the administration of a shared risk plan may be paid by the pension fund, the employer or both.
Funding deficit recovery plan
11(1)If the open group funded ratio falls below 100% in two successive actuarial valuation reports, a funding deficit recovery plan shall be implemented within 12 months after the review date of the second of those reports.
11(2)Within 12 months after the review date of the most recent actuarial valuation report that caused the implementation of the funding deficit recovery plan, the administrator shall submit to the Superintendent a report that details how the funding deficit recovery plan will be applied and demonstrates to the satisfaction of the Superintendent that the shared risk plan is expected to meet the primary risk management goal referred to in subsection 7(1).
11(3)A funding deficit recovery plan shall include the following funding deficit recovery actions:
(a) the funding deficit recovery actions allowed under the funding policy, including the order of priority of the actions and the timing requirements for the actions;
(b) the reduction of future base benefits; and
(c) the reduction of past base benefits of members and former members.
11(4)The funding deficit recovery actions referred to in subsection (3) may include the following actions which shall be implemented in priority to the reduction of past base benefits:
(a) subject to subsection 9(8), an increase in contributions in accordance with the contribution adjustments allowed under the funding policy;
(b) the reduction or removal of ancillary benefits if they are not vested ancillary benefits; and
(c) the reduction of future base benefits if the amount of the reduction does not exceed 5% of the amount of the base benefits in effect immediately before the funding deficit recovery plan is implemented.
11(5)If the actions taken under subsection (4) are not sufficient to meet the primary risk management goal referred to in subsection 7(1), the past base benefits and the future base benefits shall be further reduced by such percentage that the following are met as of the review date of the actuarial valuation report that caused the implementation of the funding deficit recovery plan:
(a) an open group funded ratio of 105%; and
(b) the primary risk management goal referred to in subsection 7(1).
11(6)The percentage referred to in subsection (5) shall be the same for both past base benefits of members and former members and future base benefits of members and former members.
11(7)Base benefits shall be reduced under subsection (5) no later than 18 months after the review date of the most recent actuarial valuation report that caused the implementation of the funding deficit recovery plan, unless sufficient improvement has occurred after that review date such that it can be demonstrated to the satisfaction of the Superintendent that the reduction is not required.
Funding excess utilization plan
12(1)A funding excess utilization plan shall specify the following:
(a) the minimum open group funded ratio at the valuation date to be maintained in the shared risk plan before benefit improvements may be granted, which funded ratio shall be at least 105%; and
(b) the portion of the funding excess above the open group funded ratio referred to in paragraph (a) that may be used to provide benefit improvements, which portion shall not exceed 20% of the funding excess between 105% and 140% on an open group funded ratio, unless it can be demonstrated to the satisfaction of the Superintendent that the risk management goals referred to in section 7 may be met.
12(2)A funding excess utilization plan shall contain the following elements:
(a) as a first priority and with respect to future payments, the reversal of any reduction of past base benefits and future base benefits that has not been reversed;
(b) as a second priority and with respect to future payments, the reversal of any reduction of past ancillary benefits and future ancillary benefits that has not been reversed;
(c) as a third priority and with respect to future payments, for a shared risk plan provided for in paragraph 7(3)(a), escalated adjustments and any other ancillary benefits that were affected by the conversion to a shared risk plan; and
(d) as a fourth priority, the funding excess utilization actions provided for in the funding policy.
12(3)The funding excess utilization actions referred to in paragraph (2)(d) may include the following actions:
(a) improvement of ancillary benefits above the base level specified in the funding policy;
(b) reduction of contributions as specified in the funding policy;
(c) a reserve allocation sufficient to cover projected costs of granting up to ten years of ancillary benefits as described in the funding policy;
(d) if the improvement is allowed under the Income Tax Act (Canada) for the majority of the members, improvement of past base benefits and future base benefits by an amount that does not exceed 10% of the amount of those benefits;
(e) further reduction of contributions such that the maximum contributions allowed under the Income Tax Act (Canada) are not exceeded;
(f) a permanent benefit change;
(g) a retroactive reversal of any reduction of past base benefits; and
(h) any other action acceptable to the Superintendent.
Investment policy
13(1)An investment policy shall be deemed to be the statement of investment policies and goals for a shared risk plan.
13(2)An investment policy shall specify the target investment allocation and the allowable ranges for each investment class.
13(3)An investment policy shall be interdependent with the following:
(a) the liabilities of the shared risk plan and the expected cash flows for the base benefits and ancillary benefits;
(b) the open group funded ratio of the shared risk plan;
(c) the funding policy;
(d) the risk management goals; and
(e) the results from the application of the risk management procedures.
13(4)The administrator shall review the investment policy within one month after the end of each plan year.
13(5)Subsections 44(5) and (9) and section 46.1 of Regulation 91-195 do not apply to a shared risk plan.
Actuarial valuation reports
14(1)A going concern valuation of a shared risk plan shall be performed at least once every three years to determine the maximum contributions allowed under the Income Tax Act (Canada).
14(2)The following benefits shall be valued for the purposes of a going concern valuation:
(a) the base benefits;
(b) if a pension plan is converted to a shared risk plan, all ancillary benefits as of the conversion date including the escalated adjustments provided for under the pension plan and measured immediately before the conversion date; and
(c) if the shared risk plan is a new plan, the ancillary benefits described in the funding policy.
14(3)A going concern valuation shall take into account expected future increases to earnings and any ancillary benefits described in the funding policy of the shared risk plan.
14(4)The maximum contributions allowed under a shared risk plan shall be calculated in accordance with the Income Tax Act (Canada) and based on the results of a going concern valuation.
14(5)A funding policy valuation of a shared risk plan shall be performed at least once every 12 months to determine the benefit security levels and whether or not any actions set forth in the funding policy are required to be taken.
14(6)A funding policy valuation shall include the following:
(a) the funding policy liabilities of the shared risk plan as of the valuation date;
(b) the funding policy normal cost of the shared risk plan for the 12 months after the valuation date;
(c) the present value of the excess contributions over the next 15 years that is based on the following:
(i) the excess contributions in each year calculated as follows:
A - B
where
A is the contributions expected to be made in the year; and
B is the funding policy normal cost for the year;
(ii) the discount rate used to calculate the funding policy liabilities and the funding policy normal cost; and
(iii) the projected aggregate level of earnings in respect of which contributions are to be made and benefits are to be earned by members for each year in the 15 years after the valuation date;
(d) the market value of the going concern assets of the shared risk plan;
(e) the termination value funded ratio at the valuation date calculated as follows:
C / D
where
C is the market value of the going concern assets referred to in paragraph (d); and
Dis the amount of the funding policy liabilities of the plan referred to in paragraph (a); and
(f) the 15 year open group funded ratio calculated as follows:
(E + C) / D
where
Eis the present value of the excess contributions referred to in paragraph (c);
Cis the market value of the going concern assets referred to in paragraph (d); and
Dis the amount of the funding policy liabilities of the plan referred to in paragraph (a).
14(7)For the purposes of a valuation made under subsection (6),
(a) the valuation method used shall be the unit credit cost method unless otherwise approved by the Superintendent;
(b) the funding policy liabilities and the funding policy normal cost of the plan shall be calculated in accordance with accepted actuarial practice and a statement to this effect shall be signed by an actuary; and
(c) the actuarial assumptions used to calculate the funding policy liabilities and the funding policy normal cost of the plan shall meet the following criteria:
(i) they shall include a discount rate that complies with subsection 6(3);
(ii) they shall reflect the current generational mortality tables approved by the Superintendent; and
(iii) they shall be consistent with the shared risk plan experience, future expectations for the plan and accepted actuarial practice.
14(8)Section 8, paragraph 9(1)(b), subsections 9(2), (3), (3.1), (3.11), (3.2), (4), (5), (5.1), (6), (7) and (7.1) and section 10 of Regulation 91-195 do not apply to a shared risk plan.
Asset liability model
15(1)The viability of a shared risk plan shall be tested using an asset liability model approved by the Superintendent.
15(2)An asset liability model shall comply with the following:
(a) subject to subsection (3), the economic assumptions shall be established based on the actuary’s best estimates taking into account the current economic environment and future expectations, shall reflect a reasonable distribution of future economic scenarios, and shall be applied for asset and liability projections using a stochastic methodology;
(b) the economic assumptions shall be reviewed at least once every 12 months;
(c) the demographic assumptions used for the asset liability model shall be the same as those used for the calculation of the funding policy liabilities;
(d) the assumptions regarding the number of members eligible for future base benefits and their demographic characteristics shall reflect the profile of the members of the shared risk plan as of the review date of the actuarial valuation report and shall not allow for increases in the number of members eligible for future base benefits unless approved by the Superintendent; and
(e) the model shall produce at least 1,000 series of simulations of economic parameters for a period of not less than 20 years, resulting in a minimum of 20,000 observations of the financial position of the plan.
15(3)The economic assumptions referred to in paragraph (2)(a) shall not be used unless approved by the Superintendent.
15(4)The testing performed using an asset liability model shall comply with the following:
(a) the testing shall be performed by an actuary at least once every 12 months;
(b) subject to subsection (5), the testing shall be performed on the basis of the funding policy valuation referred to in subsections 14(5), (6) and (7);
(c) the testing shall take into account the current funding policy, including the current risk management goals, the current funding deficit recovery plan and the current funding excess utilization plan; and
(d) the results shall show the probabilities associated with the risk management goals.
15(5)The excess contributions in each future year as determined under paragraph 14(6)(c) shall be considered as assets for the purpose of the asset liability model.
Wind-up of shared risk plan
16(1)For the purposes of section 100.63 of the Act, a shared risk plan shall be wound-up in whole or in part in the following conditions:
(a) the Superintendent orders a wind-up of the plan in whole or in part under section 61 of the Act; or
(b) the person or persons who established the plan terminate it.
16(2)If a defined benefit plan is converted to a shared risk plan which is wound-up under paragraph (1)(a) within five years after the conversion date, the Superintendent may determine that the conversion is void and may require that the plan be wound-up as a defined benefit plan under Part 1 of the Act.
16(3)If a defined benefit plan is converted to a shared risk plan which is wound-up under paragraph (1)(b) within five years after the conversion date, the conversion shall be void and the plan shall be wound-up as a defined benefit plan under Part 1 of the Act.
16(4)Within six months after the effective date of the wind-up of a shared risk plan, the administrator shall prepare a wind-up report as of the effective date of the wind-up.
16(5)The liabilities of each member or former member entitled to base benefits under the plan shall be calculated as of the effective date of the wind-up and shall be equal to the amount of the funding policy liabilities using the same assumptions used in the most recent valuation of the funding policy of the plan.
16(6)A wind-up funded ratio shall be calculated using the formula referred to in paragraph 14(6)(e) except that the value of the assets shall be reduced by the wind-up expenses.
16(7)The wind-up value of the benefits of each member or former member in the plan shall be calculated as follows:
F × G
7where
7F is the funding policy liabilities of the benefits that each member or former member is entitled to; and
7G is the wind-up funded ratio calculated under subsection (6).
16(8)Subsection 49(6), paragraphs 49(8)(a) and (b), subsection 49(11) and sections 50, 50.1 and 50.2 of Regulation 91-195 do not apply to a shared risk plan.
Conversion of shared risk plan
17A shared risk plan shall not be converted to a defined benefit plan or a defined contribution plan within five years after
(a) the date the plan was established if the plan is new, or
(b) the date a pension plan was converted to the shared risk plan.
Termination value
18(1)For the purposes of subsection 100.62(6) of the Act and subject to subsection (2), the termination value for a shared risk plan at the valuation date shall be the greater of
(a) the employee contributions and interest on them as prescribed in section 27, and
(b) the amount calculated as follows:
H × I
where
H is the actuarial value of the base and ancillary benefits accrued at the termination date using the following factors:
(i) an assumed retirement date that is the normal retirement date, and
(ii) the discount rate and the mortality basis used in the calculation of the funding policy liabiltities; and
Iis the lesser of the following termination value funded ratios:
(i)the termination value funded ratio as of the review date of the most recent actuarial valuation report and calculated under paragraph 14(6)(e); and
(ii)the termination value funded ratio estimated under subsection (2).
18(2)If the administrator has reason to believe that the termination value funded ratio has been reduced by more than 10% from the ratio referred to in subparagraph (i) of the explanation for “I” in paragraph (1)(b) before the termination value is calculated under paragraph (1)(b), payment of the termination value shall be suspended until a new termination value funded ratio is calculated under paragraph 14(6)(e).
18(3)Section 55 of the Act does not apply to a shared risk plan.
Prescribed time
19(1)For the purposes of subsection 100.5(11) of the Act,
(a) within one month after the date a deadlock referred to in subsection 100.5(10) of the Act occurs, the board of trustees shall notify the Superintendent of
(i) the deadlock, and
(ii) the dispute resolution process that the board of trustees is using to resolve the deadlock; and
(b) if the board of trustees fails to act within six months after the date the deadlock occurred, the Superintendent may commence to act under subsection 100.5(11) of the Act.
19(2)The time prescribed for the purposes of subsection 100.61(1) and section 100.64 of the Act is nine months after the valuation date.
19(3)The time prescribed for the purposes of subsection 100.62(4) of the Act is 90 days after the member or former member receives notice of his or her rights.
19(4)The documents referred to in subsection 100.7(1) of the Act shall be filed with the Superintendent at the same time as the actuarial valuation report.
Disclosure of information
20(1)The administrator shall disclose information concerning a shared risk plan and its benefits to the following persons:
(a) a person when he or she becomes eligible to be a member of a shared risk plan;
(b) a member or former member on termination of employment, termination of membership or retirement; and
(c) the spouse or common-law partner of a member or former member on the death of the member or former member.
20(2)The information referred to in subsection (1) shall include the following:
(a) a clear, plain language statement that the contributions are limited to those allowed under the funding policy, that base benefits of members and former members and ancillary benefits of members and former members may be reduced if the assets of the pension fund are insufficient to pay the benefits and that the reduction may apply to past base benefits, future base benefits, past ancillary benefits and future ancillary benefits;
(b) the most recently calculated open group funded ratio and termination value funded ratio;
(c) a summary of the benefits under the shared risk plan;
(d) factors that would be used by the administrator in reducing or increasing benefits; and
(e) if assets are transferred out of the shared risk plan in accordance with a portability option, the rules governing the calculation of the termination value.
20(3)On the conversion of a defined benefit plan to a shared risk plan, the administrator shall disclose the following information to the members and former members of the defined benefit plan:
(a) the benefits provided under the defined benefit plan;
(b) information regarding the conversion of benefits for service rendered on or before the conversion date to benefits under the shared risk plan; and
(c) information regarding how member benefits will be calculated on the termination of employment, termination of membership or death of a member or former member or the death of the spouse or common-law partner of a member or former member.
20(4)Within 12 months after the review date of each actuarial valuation report prepared for the shared risk plan, the administrator shall disclose the following information to the employer or employers, the members, the former members and the trade union that represents the members :
(a) the open group funded ratio and the termination value funded ratio;
(b) the investment performance of the pension fund;
(c) the funding policy liabilities;
(d) the results of the testing performed using the asset liability model, including the probabilities associated with the risk management goals;
(e) the administrator’s assessment of the need to reduce benefits or the opportunity to increase benefits, including a description of the risk factors affecting the plan;
(f) a summary of the funding policy; and
(g) a description of how member benefits would be calculated if the plan were terminated.
20(5)If the Superintendent issues guidelines under subsection 100.8(1) of the Act, the administrator shall disclose the results of any tests required by the guidelines to the Superintendent at the same time as the results referred to in paragraph (4)(d) are disclosed.
20(6)Disclosure of information under this section shall be in writing and electronic disclosure is permitted.
20(7)Paragraphs 15(1)(j), (k) and (n), 16(1)(g) and 16(3)(g), subparagraph 16(4)(b)(iii) and section 18 of Regulation 91-195 do not apply to a shared risk plan.
Application for registration of shared risk plan
21Paragraphs 4(1)(d) and (f) of Regulation 91-195 do not apply to a shared risk plan.
Transfers and purchases
22Section 19 of Regulation 91-195 does not apply to a shared risk plan.
Withdrawals
23Section 40.1 of the Act does not apply to a shared risk plan.
Variation in payments for disability
24Subsection 33(2) of the Act does not apply to a shared risk plan.
Pre-retirement death benefits
25(1)The termination value of a deferred pension referred to in subsection 43.1(1) or (2) of the Act shall be calculated in accordance with section 18.
25(2)Section 26.1 of Regulation 91-195 does not apply to a shared risk plan.
Breakdown of a marriage or common-law partnership
26(1)If the termination value of the benefit of a member or former member under a shared risk plan is to be divided on the breakdown of a marriage or common-law partnership under section 44 of the Act, the termination value shall be calculated in accordance with section 18.
26(2)The references to “defined benefit plan” in subsections 30(3) and (4) and 31(5), (6) and (8) of Regulation 91-195 shall be read as references to “shared risk plan”.
26(3)For the purposes of this section, any reference in Regulation 91-195 to the calculation of the commuted value under section 29, or any subsection of section 29, of that Regulation shall be read as a reference to the calculation of the termination value in accordance with section 18.
26(4)Subsections 29(1), (2), (3) and (4), 30(2) and (2.1), 31(1), (2), (3), (4) and (7) and section 34 of Regulation 91-195 do not apply to a shared risk plan.
Interest
27(1)For the purposes of section 54 of the Act, the interest rate credited to contributions made by members to a pension fund for a shared risk plan shall be calculated for each plan year as follows:
J - K
1where
1J is the rate of return attributed to the pension fund or the part of the pension fund to which the contributions are made; and
1K is the rate that can reasonably be attributed to the expenses of administering the pension plan that are not required to be paid by the employer.
27(2)Interest on a member’s additional voluntary contributions or optional ancillary contributions shall be calculated in accordance with subsection (1).
27(3)Interest on a member’s contributions made during a plan year shall be calculated in accordance with subsection (1) and shall be credited
(a) not later than the first day of the month after the month in which the contributions are made or are required to be made, whichever occurs first, to the pension fund, or
(b) annually, not later than the first day of the month after the month in which the last day of the plan year occurs, by applying 50% of the applicable annual interest rate to the total member’s contributions made during the plan year.
27(4)The administrator shall choose one of the methods of crediting interest in accordance with paragraphs (3)(a) and (b) and shall apply that method consistently unless the plan is amended in accordance with the Act to change that method.
27(5)Not less than once in each plan year, the administrator shall credit interest on
(a) contributions for the plan year, and
(b) contributions with interest credited to contributions during any previous plan years.
27(6)If a payment or transfer is to be made from a shared risk plan, the administrator shall credit interest, calculated in accordance with subsection (7),
(a) to the contributions made by a member, with interest, from the last day of the most recent period for which interest on contributions was credited to the date of termination of employment, termination of membership, retirement or death, and
(b) to the termination value from the date of termination of employment, termination of membership, retirement or death to the date of payment or transfer, inclusive.
27(7)Unless otherwise provided for in the Act or the regulations, the administrator shall calculate interest to be credited under paragraphs (6)(a) and (b) in accordance with the following:
(L × M) / 12
7where
7L is the interest rate most recently calculated for the fund in accordance with subsection (1); and
7M is the number of months, including parts of a month, in the periods described in paragraphs (6)(a) and (b).
27(8)The rate of interest paid on money or assets to be returned under an order made by the Superintendent under the Act or an order made by the Board under subsection 76(1) of the Act after a payment or transfer from a pension plan shall be the interest rate payable on a verdict or judgment under the Rules of Court, calculated from the date on which the payment or transfer to which the order relates took place to the date of compliance with the order, inclusive.
27(9)Section 43 of Regulation 91-195 does not apply to a shared risk plan.
Surplus
28Sections 47 and 48 of Regulation 91-195 do not apply to a shared risk plan.
Fees
29(1)Subject to subsections (6) and (7), the fee for an application for registration of a shared risk plan is $10 per member of the plan employed in New Brunswick or in a designated jurisdiction with which the Minister has entered into an agreement under paragraph 92(1)(a) or subsection 93.3(1) of the Act, but not less than $200 and not more than $20,000.
29(2)Subject to subsections (6) and (7), the fee for an application for registration of an amendment to a shared risk plan is $200 per application.
29(3)Subject to subsections (6) and (7), the fee for filing a wind-up report for a shared risk plan is $10 per member of the plan employed in New Brunswick or in a designated jurisdiction with which the Minister has entered into an agreement under paragraph 92(1)(a) or subsection 93.3(1) of the Act, but not less than $200 and not more than $20,000.
29(4)For the purposes of a shared risk plan, the fee for an application for the Superintendent’s consent to a transfer of assets under section 69 of the Act is $10 per member of the plan employed in New Brunswick or in a designated jurisdiction with which the Minister has entered into an agreement under paragraph 92(1)(a) or subsection 93.3(1) of the Act, but not less than $200 and not more than $20,000.
29(5)For the purposes of a shared risk plan, the fee for a request for the Superintendent’s consent to a transfer of assets under section 70 of the Act is $10 per member of the plan employed in New Brunswick or in a designated jurisdiction with which the Minister has entered into an agreement under paragraph 92(1)(a) or subsection 93.3(1) of the Act, but not less than $200 and not more than $20,000.
29(6)Subject to subsection (7), if an application referred to in subsection (1) or (2) or a wind-up report referred to in subsection (3) is made or filed after the applicable deadline, the fee payable shall be increased by 20% and interest shall accrue and be payable at the rate of 1% per month, compounded monthly, commencing on the first day of the second calendar month after the month in which the deadline occurs and continuing until the day on which the application or report is made or filed, as the case may be.
29(7)The fee under subsection (6) shall not be less than $200.
29(8)Paragraphs 56(1)(a), (b), (g), (h) and (i) of Regulation 91-195 do not apply to a shared risk plan.
Commencement
30This Regulation shall be deemed to have come into force on July 1, 2012.
N.B. This Regulation is consolidated to August 14, 2012.