Acts and Regulations

91-195 - General

Section 42.001
Disposition versions

Full text
Letters of credit
2020-51
42.001(1)The following definitions apply in this section and Schedule A.
“issuer” means an issuer of a letter of credit.(émetteur)
“prescribed employer” means an employer required to make contributions under a defined benefit plan that is not a multi-employer pension plan, or a person required to make contributions on behalf of an employer under a defined benefit plan that is not a multi-employer pension plan. (employeur visé)
“prescribed trustee” means a trustee of a pension fund that is administered under a trust described in paragraph 11(b).(fiduciaire visé)
42.001(2)This section applies if a prescribed employer is required to make payments into the pension fund with respect to a solvency deficiency.
42.001(3)Despite subsection 35(2), instead of making payments into the pension fund with respect to the solvency deficiency, the prescribed employer may provide a letter of credit to a prescribed trustee if the requirements of this section are satisfied.
42.001(4) A letter of credit shall satisfy the requirements set out in Schedule A.
42.001(5)A prescribed employer is not entitled to provide a letter of credit if the total amount of all letters of credit provided to the prescribed trustee for the pension plan would exceed 15% of the solvency liabilities of the plan.
42.001(6)The prescribed employer shall provide the letter of credit to the prescribed trustee at least 15 days before the date on which the first installment of the special payments to which the letter of credit relates is due.
42.001(7)If a letter of credit is being amended, the prescribed employer shall provide the amended letter of credit to the prescribed trustee at least 15 days before the date on which any amendment takes effect.
42.001(8)Subject to subsection (9), if a letter of credit is being renewed, the prescribed employer shall provide the renewed letter of credit to the prescribed trustee at least 15 days before the date on which the letter of credit would have expired.
42.001(9)If a letter of credit is being renewed, the prescribed employer may provide notice of the renewal to the prescribed trustee, and a copy of the notice to the issuer, at least 15 days before the date on which the letter would have expired instead of providing the renewed letter of credit in accordance with subsection (8).
42.001(10)If a letter of credit is being replaced by another letter of credit, the prescribed employer shall provide the replacement letter of credit to the prescribed trustee at least 15 days before the date on which the original letter of credit expires.
42.001(11)Subject to subsection (12), a prescribed employer who is required to provide a letter of credit, an amended letter of credit, a renewed letter of credit or a replacement letter of credit under subsection (6), (7), (8) or (10), as the case may be, within the period specified in that subsection shall give a copy of it to the administrator within the same period.
42.001(12)A prescribed employer who provides a notice of renewal in accordance with subsection (9) instead of complying with subsection (8) shall provide a copy of the notice of renewal to the administrator within the period referred to in subsection (9).
42.001(13)Within five days after receiving a copy of the letter of credit, the amended letter of credit, the replacement letter of credit, the renewed letter of credit or the notice of the renewal of the letter of credit, the administrator shall give notice to the Superintendent by filing the following documents with the Superintendent:
(a) a certified copy of the letter of credit, the amended letter of credit, the replacement letter of credit, the renewed letter of credit or the notice of the renewal, and
(b) a certificate indicating whether the letter of credit satisfies the requirements of this Regulation and the requirements of the Income Tax Act (Canada).
42.001(14)The prescribed trustee holds the letter of credit in trust for the pension plan.
42.001(15)A prescribed trustee who holds a letter of credit in trust for a pension plan is required to demand payment of the amount of the letter of credit into the pension fund by the issuer if any of the following circumstances exist:
(a) if the letter of credit does not satisfy the requirements of this Regulation or the Income Tax Act (Canada);
(b) if the administrator gives written notice to the prescribed trustee that the prescribed employer intends to wind up the pension plan under subsection 60(1) of the Act;
(c) if the Superintendent issues an order under subsection 61(1) of the Act requiring the wind-up of the pension plan;
(d) if the prescribed employer is subject to bankruptcy proceedings under the Bankruptcy and Insolvency Act (Canada);
(e) if an application or petition has been filed under the Winding-up and Restructuring Act (Canada) by the prescribed employer or against the prescribed employer;
(f) if, under the terms of an agreement under section 93.3 of the Act between the Minister and an authorized representative of a designated jurisdiction whose pension benefits legislation applies to the pension plan, the prescribed trustee is otherwise required to demand payment of the amount of the letter of credit;
(g) if, under the terms of the trust agreement related to the letter of credit, the prescribed trustee is otherwise required to demand payment of the amount of the letter of credit.
42.001(16)If the issuer does not pay the amount of the letter of credit on the prescribed trustee’s demand,
(a) the prescribed employer shall immediately pay that amount into the pension fund, and
(b) the prescribed employer shall give written notice to the Superintendent that the issuer has not paid the amount of the letter of credit.
42.001(17)If a prescribed trustee demands payment of the amount of a letter of credit, the prescribed trustee shall promptly notify the administrator, the prescribed employer and the Superintendent.
42.001(18)If the issuer does not pay the amount of the letter of credit on the prescribed trustee’s demand, the prescribed trustee shall promptly notify the administrator, the prescribed employer and the Superintendent.
42.001(19)The fees or expenses associated with obtaining, holding, amending or cancelling a letter of credit are not payable from the pension fund.
42.001(20)Subject to section 19 of the Act, the fees and expenses associated with enforcement measures in respect of a letter of credit are payable from the pension fund.
2020-51; 2022-63
Letters of credit
2020-51
42.001(1)The following definitions apply in this section and Schedule A.
“issuer” means an issuer of a letter of credit.(émetteur)
“prescribed employer” means an employer required to make contributions under a defined benefit pension plan that is not a multi-employer pension plan, or a person required to make contributions on behalf of an employer under a defined benefit pension plan that is not a multi-employer pension plan. (employeur visé)
“prescribed trustee” means a trustee of a pension fund that is administered under a trust described in paragraph 11(b).(fiduciaire visé)
42.001(2)This section applies if a prescribed employer is required to make payments into the pension fund with respect to a solvency deficiency.
42.001(3)Despite subsection 35(2), instead of making payments into the pension fund with respect to the solvency deficiency, the prescribed employer may provide a letter of credit to a prescribed trustee if the requirements of this section are satisfied.
42.001(4) A letter of credit shall satisfy the requirements set out in Schedule A.
42.001(5)A prescribed employer is not entitled to provide a letter of credit if the total amount of all letters of credit provided to the prescribed trustee for the pension plan would exceed 15% of the solvency liabilities of the plan.
42.001(6)The prescribed employer shall provide the letter of credit to the prescribed trustee at least 15 days before the date on which the first installment of the special payments to which the letter of credit relates is due.
42.001(7)If a letter of credit is being amended, the prescribed employer shall provide the amended letter of credit to the prescribed trustee at least 15 days before the date on which any amendment takes effect.
42.001(8)Subject to subsection (9), if a letter of credit is being renewed, the prescribed employer shall provide the renewed letter of credit to the prescribed trustee at least 15 days before the date on which the letter of credit would have expired.
42.001(9)If a letter of credit is being renewed, the prescribed employer may provide notice of the renewal to the prescribed trustee, and a copy of the notice to the issuer, at least 15 days before the date on which the letter would have expired instead of providing the renewed letter of credit in accordance with subsection (8).
42.001(10)If a letter of credit is being replaced by another letter of credit, the prescribed employer shall provide the replacement letter of credit to the prescribed trustee at least 15 days before the date on which the original letter of credit expires.
42.001(11)Subject to subsection (12), a prescribed employer who is required to provide a letter of credit, an amended letter of credit, a renewed letter of credit or a replacement letter of credit under subsection (6), (7), (8) or (10), as the case may be, within the period specified in that subsection shall give a copy of it to the administrator within the same period.
42.001(12)A prescribed employer who provides a notice of renewal in accordance with subsection (9) instead of complying with subsection (8) shall provide a copy of the notice of renewal to the administrator within the period referred to in subsection (9).
42.001(13)Within five days after receiving a copy of the letter of credit, the amended letter of credit, the replacement letter of credit, the renewed letter of credit or the notice of the renewal of the letter of credit, the administrator shall give notice to the Superintendent by filing the following documents with the Superintendent:
(a) a certified copy of the letter of credit, the amended letter of credit, the replacement letter of credit, the renewed letter of credit or the notice of the renewal, and
(b) a certificate indicating whether the letter of credit satisfies the requirements of this Regulation and the requirements of the Income Tax Act (Canada).
42.001(14)The prescribed trustee holds the letter of credit in trust for the pension plan.
42.001(15)A prescribed trustee who holds a letter of credit in trust for a pension plan is required to demand payment of the amount of the letter of credit into the pension fund by the issuer if any of the following circumstances exist:
(a) if the letter of credit does not satisfy the requirements of this Regulation or the Income Tax Act (Canada);
(b) if the administrator gives written notice to the prescribed trustee that the prescribed employer intends to wind up the pension plan under subsection 60(1) of the Act;
(c) if the Superintendent issues an order under subsection 61(1) of the Act requiring the wind-up of the pension plan;
(d) if the prescribed employer is subject to bankruptcy proceedings under the Bankruptcy and Insolvency Act (Canada);
(e) if an application or petition has been filed under the Winding-up and Restructuring Act (Canada) by the prescribed employer or against the prescribed employer;
(f) if, under the terms of an agreement under section 93.3 of the Act between the Minister and an authorized representative of a designated jurisdiction whose pension benefits legislation applies to the pension plan, the prescribed trustee is otherwise required to demand payment of the amount of the letter of credit;
(g) if, under the terms of the trust agreement related to the letter of credit, the prescribed trustee is otherwise required to demand payment of the amount of the letter of credit.
42.001(16)If the issuer does not pay the amount of the letter of credit on the prescribed trustee’s demand,
(a) the prescribed employer shall immediately pay that amount into the pension fund, and
(b) the prescribed employer shall give written notice to the Superintendent that the issuer has not paid the amount of the letter of credit.
42.001(17)If a prescribed trustee demands payment of the amount of a letter of credit, the prescribed trustee shall promptly notify the administrator, the prescribed employer and the Superintendent.
42.001(18)If the issuer does not pay the amount of the letter of credit on the prescribed trustee’s demand, the prescribed trustee shall promptly notify the administrator, the prescribed employer and the Superintendent.
42.001(19)The fees or expenses associated with obtaining, holding, amending or cancelling a letter of credit are not payable from the pension fund.
42.001(20)Subject to section 19 of the Act, the fees and expenses associated with enforcement measures in respect of a letter of credit are payable from the pension fund.
2020-51