Following up on the solvency funding relief for Alberta
specified multi-employer pension plans (SMEPPs) which was passed
last year, the Alberta government recently amended the Employment Pension Plans
Regulation to also provide solvency funding relief to defined
benefit plans which are not SMEPPs.
Notably, the regulation does not require any form of member
consent, or lack of member objection, in order to implement the
solvency funding relief. Defined benefit plans, which are not
SMEPPs, may now apply to the Alberta Superintendent to:
consolidate solvency funding deficiencies that are identified
in actuarial valuation reports and cost certificates prepared as of
the period beginning on December 31, 2011 and ending on December
31, 2012; and
pay that consolidated solvency deficiency over a ten-year
(rather than a five-year) amortization period, subject to certain
EPPA Update 12-01 indicates that these
conditions include that the application be in writing and the plan
administrator confirm that it agrees to comply with any other
conditions that are set by the Superintendent, "which may
apply on a plan-by-plan basis, following the Superintendent's
review of the application valuation."
The Update confirms that where a valuation report has an
effective date within the relevant period (e.g. as of December 31,
2011) the solvency funding relief measures can still be used. The
Update sets out the required documentation for plan administrators
that have already filed such a valuation report and have started to
make contributions based on such a report.
Where benefits (other than ongoing pension payments) are to be
paid from a plan that has taken advantage of the solvency funding
relief measures, the regulations require that the employer make one
single lump sum payment to the plan, in an amount that is equal to
any transfer deficiency that exists in relation to that person.
That payment must be made either before making the payment to the
person, or must be included in the next remittance of contributions
to the holder of plan assets.
Plan administrators will be permitted to make only
one application to consolidate the solvency
deficiencies and extend the amortization period under these
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