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 past 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)
subject to subsection (2.1), 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 period specified under subsection 9(4).
7(2.1)Paragraph (2)(d) does not apply if
(a)
the benefit improvement is made as a result of contingent indexing and there is at least a 95% probability that the past base benefits at the end of each year will not be reduced over a 20-year period; and
(b)
the administrator confirms that the asset mix of the shared risk plan had not been changed in a manner that increased investment risks for the shared risk plan in the six-month period before the contingent indexing occurred.
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 or a best 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 shared risk plan.
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.
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.