Bill C-27: An Act to amend the Pension Benefits Standards Act, 1985

Pension Benefits Standards Act, 1985 Coming into Force Explanatory Notes First Session, Forty-second Parliament, 64-65 Elizabeth II, 2015-2016 HOUSE OF COMMONS OF CANADA BILL C-27 An Act to amend the Pension Benefits Standards Act, 1985 FIRST READING, October 19, 2016 MINISTER OF FINANCE 90811 SUMMARY This enactment amends the Pension Benefits Standards Act, 1985 to provide a framework for the establishment, administration and supervision of target benefit plans. It also amends the Act to permit pension plan administrators to purchase immediate or deferred life annuities for former members or survivors so as to satisfy an obligation to provide pension benefits if the obligation arises from a defined benefit provision. Available on the Parliament of Canada Web Site at the following address: http://www.parl.gc.ca 1st Session, 42nd Parliament, 64-65 Elizabeth II, 2015-2016 HOUSE OF COMMONS OF CANADA BILL C-27 An Act to amend the Pension Benefits Standards Act, 1985 Her Majesty, by and with the advice and consent of the Senate and House of Commons of Canada, enacts as follows: R.‍S.‍, c. 32 (2nd Supp.‍) Pension Benefits Standards Act, 1985 1 (1) The definitions defined benefit plan, defined benefit provision and pension benefit credit in subsection 2(1) of the Pension Benefits Standards Act, 1985 are replaced by the following: defined benefit plan means a pension plan that is neither a defined contribution plan nor a target benefit plan; (régime à prestations déterminées) defined benefit provision means a provision of a pension plan other than a target benefit plan under which pension benefits for a member are determined in any way other than that described in the definition defined contribution provision; (disposition à prestations déterminées) pension benefit credit, in relation to any person, means the aggregate value at a particular time of that person’s pension benefit and other benefits provided under a pension plan, determined in accordance with the regulations;  (droit à pension) 2010, c. 12, s. 1786(3)‍(E) (2) Paragraph (b) of the definition former member in subsection 2(1) of the Act is replaced by the following: (b) in section 9.‍2 and paragraph 28(1)‍(b.‍1), a person who has either ceased membership in the plan or retired and has not, before the termination of the whole of the plan, (i) had a life annuity purchased for them that, under section 17.‍1, satisfies all of the plan’s obligations with respect to their benefits, (ii) transferred their pension benefit credit under section 26, (iii) used their pension benefit credit to purchase a life annuity under section 26, or (iv) had their pension benefits transferred to another pension plan; or (3) Paragraphs (a) and (b) of the definition former member in subsection 2(1) of the Act are replaced by the following: (a) except in paragraph 7.‍12(b), sections 9.‍2 and 24, paragraph 28(1)‍(b.‍1) and subsection 28.‍1(1), a person who, on or after January 1, 1987, has either ceased membership in the plan or retired; (b) in paragraph 7.‍12(b), section 9.‍2, paragraph 28(1)‍(b.‍1) and subsection 28.‍1(1), a person who has either ceased membership in the plan or retired and has not, before the termination of the whole of the plan, (i) surrendered, under section 9.‍7, all of their pension benefits under the plan, (ii) had a life annuity purchased for them that, under section 17.‍1, satisfies all of the plan’s obligations with respect to their benefits, (iii) transferred their pension benefit credit under section 26, (iv) used their pension benefit credit to purchase a life annuity under section 26, or (v) had their pension benefits transferred to another pension plan; or (4) Subsection 2(1) of the Act is amended by adding the following in alphabetical order: target benefit plan means a pension plan that is registered as a target benefit plan, and includes an unregistered pension plan that is intended to be registered as a target benefit plan; (régime à prestations cibles) (5) Section 2 of the Act is amended by adding the following after subsection (3): Former member (3.‍1) For the purposes of this Act, a former member of a pension plan who has their pension benefits under that plan transferred to another pension plan — or who, in exchange for the surrender of all or part of their pension benefit under that plan, obtains under section 9.‍7 a pension benefit under another pension plan — and who is not eligible for membership in that other plan is deemed to be a former member of that other plan. 1998, c. 12, s. 5 2 (1) Paragraphs 7(1)‍(a) and (b) of the Act are replaced by the following: (a) in the case of a multi-employer pension plan that is established under one or more collective agreements and that is not a target benefit plan, a board of trustees or other similar body constituted in accordance with the terms of the plan or the collective agreement or agreements to manage the affairs of the plan; (b) in the case of a multi-employer pension plan that is not a target benefit plan and that is not described in paragraph (a), a pension committee constituted in accordance with the terms of the plan, subject to section 7.‍1, to manage the affairs of the plan; (b.‍1) in the case of a target benefit plan, a board of trustees or other similar body constituted in accordance with the terms of the plan’s governance policy, subject to section 7.‍12, to manage the affairs of the plan; or 1998, c. 12, s. 5 (2) The portion of paragraph 7(1)‍(c) of the English version of the Act before subparagraph (i) is replaced by the following: (c) in the case of any other pension plan, 3 The Act is amended by adding the following after section 7.‍1: Governance policy 7.‍11 A written governance policy must be established for a target benefit plan in accordance with the regulations. Target benefit plan board or similar body 7.‍12 A target benefit plan’s board of trustees or other similar body must include (a) at least one individual chosen jointly by the plan’s members and by employees who are eligible for membership in the plan; and (b) if the total number of the following former members and survivors is equal to or greater than the prescribed number, at least one individual chosen jointly by (i) the plan’s former members, (ii) the survivors of the plan’s members or former members, if the survivors are entitled to pension benefits under the target benefit plan, and (iii) the survivors of members or of former members of any other pension plan, if the survivors have consented under section 9.‍7 to surrender pension benefits under that other plan in exchange for pension benefits under the target benefit plan. 4 The Act is amended by adding the following after section 7.‍3: Choosing individuals 7.‍31 For the purposes of section 7.‍12, individuals shall be chosen, directly or indirectly, in the prescribed manner. 2010, c. 12, s. 1791(4) 5 (1) Subparagraph 8(1)‍(c)‍(ii) of the Act is replaced by the following: (ii) other amounts due to the pension fund from the employer, including any amounts that are required to be paid under subsection 9.‍14(2), 29(6) or 29(6.‍21). 1998, c. 12, s. 6(3) (2) Subsection 8(6) of the English version of the Act is replaced by the following: Conflict of interest (6) A person shall not accept an appointment to a body referred to in paragraph 7(1)‍(a), (b) or (b.‍1) or subparagraph 7(1)‍(c)‍(ii) if there would be a material conflict of interest between that person’s role as a member of that body and that person’s role in any other capacity. 2010, c. 12, s. 1793(1) 6 Subsections 9(1.‍1) and (1.‍2) of the Act are replaced by the following: Payments by employer (1.‍1) In respect of a pension plan that is neither a multi-employer pension plan nor a target benefit plan, the employer shall pay into the pension fund all amounts required to meet the prescribed tests and standards for solvency. Multi-employer pension plan (1.‍2) In respect of a multi-employer pension plan that is not a target benefit plan, each participating employer shall pay into the pension fund all contributions that they are required to pay under an agreement between participating employers or a collective agreement, statute or regulation. Target benefit plan (1.‍3) In respect of a target benefit plan, the employer — or, if the plan is also a multi-employer pension plan, each participating employer — shall pay into the pension fund all contributions that they are required to pay under the plan’s funding policy. 7 The Act is amended by adding the following after section 9.‍2: Target benefit plan 9.‍3 Section 9.‍2 does not apply with respect to a target benefit plan. Target Benefit Plans Funding policy 9.‍4 (1) A target benefit plan must include a funding policy that is approved by the administrator and that sets out (a) the plan’s target pension benefit formula — namely, the formula for determining the manner in which pension benefits under the plan are determined on the day on which the plan is established; (b) the manner in which pension benefits under the plan are currently determined, if different from the target pension benefit formula; (c) the employer contributions — and, if any, the member contributions — to the plan; (d) the objectives of the plan with respect to pension benefit stability; (e) a deficit recovery plan; (f) a surplus utilization plan; and (g) any other content that may be prescribed. Deficit recovery plan (2) The deficit recovery plan must set out (a) the circumstances that trigger its implementation; (b) a list of the measures to be taken to implement it; (c) the order in which the measures must be taken; and (d) any other content that may be prescribed. Surplus utilization plan (3) The surplus utilization plan must set out (a) the circumstances that trigger its implementation; (b) subject to subsection (4), a list of the measures to be taken to implement it; (c) subject to subsection (4), the order in which the measures must be taken; and (d) any other content that may be prescribed. Cancellation of deficit recovery plan measure (4) The surplus utilization plan must specify that the first measure to be taken is the cancellation, in the reverse order to the one in which they were taken, of any measures under the deficit recovery plan that are still in place. Actuarial modelling 9.‍5 (1) The administrator of a target benefit plan must ensure that actuarial modelling with respect to the objectives referred to in paragraph 9.‍4(1)‍(d) is conducted before the plan is established and at intervals or times, and in circumstances, that may be prescribed. Initial actuarial modelling (2) The administrator must not approve the funding policy unless the actuarial modelling conducted before the plan is established shows that the plan will, at the time of its establishment, meet the objectives referred to in paragraph 9.‍4(1)‍(d). No defined contribution provision 9.‍6 A target benefit plan must not contain a defined contribution provision. Exchange of pension benefits 9.‍7 (1) An employer may propose to any of its employees who are members of a pension plan (referred to in this section as the original plan), to any former members of the plan and to any other persons who are entitled to a pension benefit under the plan that they surrender all or part of their pension benefit under the plan in exchange for a pension benefit under a target benefit plan (referred to in this section as the second plan). Consent required (2) A surrender described in subsection (1) is void or, in Quebec, null unless the employer obtains the member’s, former member’s or other person’s consent in accordance with this section. A bargaining agent may consent on behalf of a unionized member if the agent is authorized to do so. Information to be provided (3) In order to obtain consent, the employer must provide a written explanation of the provisions of the second plan, and any other information that may be prescribed, to every member, former member or other person to whom the proposal is made and to the spouse or common-law partner of the member or former member. Bargaining agent — information (4) If a bargaining agent is authorized to consent on behalf of a unionized member to whom a proposal is made, subsection (3) does not apply with respect to the unionized member and their spouse or common-law partner, and the employer must provide the prescribed information to the member, to their spouse or common-law partner and to the bargaining agent. Superintendent’s approval (5) The employer must not provide the written explanation and information under subsection (3) or (4) unless the Superintendent has approved them. The Superintendent may specify the form in which the explanation and information are to be provided for approval and may direct that the employer provide the Superintendent with any additional information that the Superintendent considers necessary. Understandable information (6) The written explanation and information referred to in subsection (3) or (4) must be prepared in a manner that is understandable by a person who does not have technical or specialized knowledge of pensions. Period to communicate consent (7) The employer must give each member, former member or other person at least the prescribed period from the day on which the written explanation and information are provided to them under subsection (3) to communicate consent. Same time (8) A member, former member or other person is to obtain their pension benefit under the second plan at the same time as they surrender their pension benefit under the original plan. Payment into second plan’s pension fund (9) If the original plan is a defined benefit plan, the employer must pay an amount determined in accordance with the regulations into the second plan’s pension fund. Non-application (10) Paragraph 18(1)‍(b) and subsection 36(4) do not apply with respect to an agreement or arrangement to surrender a pension benefit under this section. Period of employment (11) If an employee becomes a member of the second plan under this section, their period of employment is deemed, for the purposes of determining whether they are entitled to a benefit under that plan, to include the period of employment during which they were a member of the original plan. Plan established 9.‍8 A target benefit plan is established, for the purposes of subsection 10(1), when the administrator approves the funding policy. 1998, c. 12, s. 10 8 Subsection 10(6) of the Act is replaced by the following: Treatment of surplus (6) Every pension plan that is filed for registration must provide for the use of surplus during the continuation of the plan and, except in the case of a target benefit plan, on its termination. For greater certainty, the inclusion of a target benefit plan’s surplus utilization plan in its funding policy meets the requirement under this subsection. 9 The Act is amended by adding the following after section 10: Declaration for target benefit plan 10.‍01 (1) A declaration filed under paragraph 10(1)‍(c) with respect to the registration of a pension plan as a target benefit plan must specify that the plan complies with the provisions of this Act and of the regulations that apply to target benefit plans. Certificate of registration (2) If the Superintendent registers the pension plan under subsection 10(2) as a target benefit plan, its certificate of registration must specify that the plan is registered as such. No subsequent registration (3) A registered pension plan that is not a target benefit plan is not to be subsequently registered as a target benefit plan. 1998, c. 12, s. 10; 2010, c. 12, s. 1797 10 (1) The portion of subsection 10.‍1(2) of the Act before paragraph (a) is replaced by the following: Void or null amendments (2) Unless the Superintendent authorizes the amendment, an amendment — other than one that relates to a target benefit plan — is void or, in Quebec, null if (2) Section 10.‍1 of the Act is amended by adding the following after subsection (2): Void or null amendments — target benefit plan (3) An amendment that relates to a target benefit plan is void or, in Quebec, null if (a) it would amend the objectives of the plan with respect to pension benefit stability; or (b) unless it results from the implementation of the target benefit plan’s funding policy, it would have the effect of reducing (i) pension benefits accrued before the date of the amendment or pension benefit credits relating to pension benefits accrued before the date of the amendment, or (ii) an immediate or deferred pension benefit to which a member, former member or any other person was entitled before the date of the amendment. 1998, c. 12, s. 10; 2010, c. 12, s. 1799; 2012, c. 16, s. 87 11 Subsection 10.‍2(1) of the Act is replaced by the following: No transfer without permission 10.‍2 (1) Subject to section 26, the administrator may transfer or permit the transfer of any part of the assets of the pension plan that relate to defined benefit provisions to another pension plan that is not a target benefit plan only with the Superintendent’s permission, whether or not this Act applies to that other pension plan. 12 The Act is amended by adding the following after section 10.‍2: Transfer to target benefit plan 10.‍21 (1) Subject to section 26, the administrator may transfer or permit the transfer of any part of the assets of a pension plan to a target benefit plan only if that part relates to a pension benefit that a member, former member or other person entitled to a pension benefit, or that a bargaining agent, has consented to surrender under section 9.‍7 in exchange for a pension benefit under the target benefit plan. Determination of assets (2) The assets to be transferred are to be determined in accordance with the regulations. Filing (3) Within the prescribed period, the administrator must file with the Superintendent, in the form and manner that the Superintendent may direct, a declaration that the transfer complies with this Act and the regulations and is consistent with the written explanation and information provided under subsection 9.‍7(3) or (4). The Superintendent may direct the administrator to provide any additional information that the Superintendent considers necessary. 2010, c. 12, s. 1801(1) 13 Subsection 12(2) of the Act is replaced by the following: Actuarial reports, financial statements and other information (2) The administrator of a pension plan shall file with the Superintendent actuarial reports, financial statements, and any other information required by or under the regulations at any intervals or times that the Superintendent directs. However, the administrator of a target benefit plan shall file the actuarial reports with the Superintendent annually, and at any other time that the Superintendent directs. 2007, c. 35, s. 141 14 Paragraph 16.‍1(4)‍(e) of the Act is replaced by the following: (e) sections21and 21.‍1 do not apply to the calculation of the phased retirement benefit; 15 The Act is amended by adding the following after section 17: Life Annuities Life annuity in lieu of pension benefit 17.‍1 (1) The purchase of an immediate or deferred life annuity, by the administrator of a pension plan for a former member or survivor, satisfies an obligation under the plan to provide a pension benefit arising from a defined benefit provision — as well as, in the case of a deferred life annuity, an obligation under the pension plan to provide any other benefit or option described in paragraph 17(b) that relates to that pension benefit — to the former member or survivor if (a) the plan authorizes the purchase of the life annuity in satisfaction of that obligation; (b) the life annuity is of the prescribed kind; (c) the life annuity provides the former member or survivor with payments that (i) in the case of an immediate life annuity, are in the same amount and form as the pension benefit to which the former member or survivor would otherwise be entitled under the terms of the pension plan that are in place on the day of the purchase, or (ii) in the case of a deferred life annuity, are in the same amount as the pension benefit, and the related benefit or option described in paragraph 17(b), to which the former member or survivor would otherwise be entitled under the terms of the pension plan that are in place on the day of the purchase; and (d) the administrator complies with the prescribed notice requirements. Partial satisfaction (2) Despite paragraph (1)‍(c), the administrator may purchase a life annuity that provides the former member or survivor with payments that are in an amount that is the same as a part of the pension benefit or, in the case of a deferred life annuity, as a part of the pension benefit and related benefit or option. However, that purchase satisfies the obligation under the plan only with respect to that part. Superintendent’s approval (3) The administrator must obtain the Superintendent’s approval of the person from whom the administrator proposes to purchase the life annuity if that person is not a life company, as defined in subsection 2(1) of the Insurance Companies Act. Application of section 26.‍1 (4) For greater certainty, section 26.‍1 applies to the purchase of a life annuity under this section. 16 Section 19 of the Act is amended by adding the following after subsection (2): Target benefit plan (2.‍1) In the case of a target benefit plan, (a) the plan shall specify (i) that interest shall be credited on members’ required contributions at a rate equal to or greater than the rate fixed in advance by the Superintendent under subsection (2), or (ii) that members’ required contributions shall be credited with the interest, gains and losses that can reasonably be attributed to the operation of the portion of the pension fund that relates to required contributions; and (b) any members’ additional voluntary contributions under the plan shall be credited with the interest, gains and losses that can reasonably be attributed to the operation of the portion of the pension fund that relates to additional voluntary contributions. 17 The Act is amended by adding the following after section 21: Minimum Pension Benefits — Target Benefit Plans Increase in pension benefit 21.‍1 Subject to paragraph 26(3)‍(b), if a member of a target benefit plan retires, ceases to be a member or dies or if the whole or part of the plan is terminated, the pension benefit in respect of the member is to be increased by the amount determined in the prescribed manner. 1998, c. 12, s. 15(1); 2000, c. 12, par. 264(a); 2001, c. 34, s. 72(1)‍(F); 2010, c. 12, s. 1809(1) 18 Subsection 23(1) of the Act is replaced by the following: If member dies before retirement 23 (1) In the case of the death of a member of a pension plan, or of a former member who is entitled to a deferred pension benefit under section 17, the member’s or former member’s survivor is entitled to the pension benefit credit, calculated under section 21or 21.‍1, to which the member or former member would have been entitled on the day of death if they had terminated employment on that day and had not died. 2000, c. 12, s. 259(2); 2001, c. 34, s. 73(F); 2010, c. 12, s. 1811(2) 19 The portion of subsection 25(4) of the Act before paragraph (a) is replaced by the following: Power to assign to spouse, etc. (4) A member or former member of a pension plan may assign all or part of their pension benefit, pension benefit credit or other benefit under the plan to their spouse, former spouse, common-law partner or former common-law partner, effective as of divorce, annulment, separation, or breakdown of the common-law partnership, as the case may be. The assignee is, in respect of the assigned portion of the pension benefit, pension benefit credit or other benefit, deemed for the purposes of this Act, except sections21and 21.‍1, 2000, c. 12, par. 264(d); 2001, c. 34, par. 74(2)‍(F) 20 (1) The portion of subsection 26(2) of the Act before paragraph (a) is replaced by the following: If member eligible to retire (2) If a member, after becoming eligible to retire under subsection 16(2) but before the commencement of payment of a pension benefit, ceases to be a member of the pension plan or dies, the plan may — or, in the case of a target benefit plan, the plan shall — permit the member or the survivor, as the case may be, 2010, c. 12, s. 1813(1) (2) The portion of paragraph 26(3)‍(b) of the Act before subparagraph (i) is replaced by the following: (b) that, if part of the pension benefit payable results from the excess described in subsection 21(1) or, in the case of a target benefit plan, from an increase under section 21.‍1, the member or the survivor, as the case may be, must choose one of the following options in respect of that excess or increase: (3) Section 26 of the Act is amended by adding the following after subsection (3): Termination of target benefit plan (4) A former member of a target benefit plan, or any other person entitled to a pension benefit under the plan to whom subsections (1) and (2) do not apply, is entitled on the termination of the plan or on the termination of the part of the plan that applies to them to (a) transfer their pension benefit credit to another pension plan, if that other plan permits; (b) transfer their pension benefit credit to a retirement savings plan of the prescribed kind; or (c) use their pension benefit credit to purchase an immediate or deferred life annuity. 21 The Act is amended by adding the following after section 28: Information to be provided — target benefit plan 28.‍1 (1) A target benefit plan shall provide that each member and former member of the plan, every other person entitled to pension benefits under the plan and the spouse or common-law partner of each member or former member will be given, before the amendment takes effect, notice of an amendment to the plan in relation to the amount of pension benefits or contributions under the plan. Understandable notice (2) The notice shall be drafted in a manner that is understandable by a person who does not have technical or specialized knowledge of pensions. Non-application (3) Subparagraph 28(1)‍(a)‍(i) does not apply with respect to an amendment referred to in paragraph (1). 22 (1) Subsection 29(6) of the Act is amended by striking out “and” at the end of paragraph (d), by adding “and” at the end of paragraph (e) and by adding the following after paragraph (e): (f) an amount equal to any amount under subsection 9.‍7(9) that remains unpaid. 2010, c. 12, s. 1816(5); 2010, c. 25, s. 198(6) (2) Subsection 29(6.‍1) of the Act is replaced by the following: Payment by employer of pension benefits (6.‍1) If the whole of a pension plan that is neither a negotiated contribution plan nor a target benefit plan is terminated, the employer shall pay into the pension fund, in accordance with the regulations, the amount — calculated periodically in accordance with the regulations — that is required to ensure that any obligation of the plan with respect to pension benefits, as they are determined on the date of the termination, is satisfied. (3) Section 29 of the Act is amended by adding the following after subsection (6.‍2): Payment — target benefit plan (6.‍21) If the whole of a target benefit plan that is a second plan, within the meaning of subsection 9.‍7(1), is terminated on or before the day that is set out in subsection (6.‍22), (a) the pension benefit under the second plan of a member, former member or other person who made a surrender under section 9.‍7 to obtain a pension benefit under that plan shall include — instead of the part of the pension benefit that was obtained under the second plan as a result of the surrender — the pension benefit surrendered under the original plan, within the meaning of subsection 9.‍7(1), if (i) the surrendered pension benefit is related to a defined benefit provision, and (ii) the value of the surrendered pension benefit, calculated in the prescribed manner as at the date of termination of the second plan and as if the pension benefit had never been surrendered, is greater than the value of the pension benefit obtained in exchange, calculated in the prescribed manner as at the date of termination of the second plan; and (b) the employer shall pay into the second plan’s pension fund an amount determined in accordance with the regulations. Period (6.‍22) The day for the purpose of subsection (6.‍21) is the fifth anniversary of the first day on which any assets of the original plan that relate to a defined benefit provision were transferred to the second plan under subsection 10.‍21(1). 2010, c. 25, s. 198(7) (4) Subsection 29(9) of the Act is replaced by the following: Actuarial termination report (9) On the termination of the whole or part of a pension plan, the administrator of the plan shall file with the Superintendent, in the form and manner, if any, that the Superintendent directs, a termination report prepared by a person having the prescribed qualifications, setting out the nature of the pension benefits and other benefits to be provided under the plan and a description of the methods of allocating and distributing those benefits and deciding the priorities in respect of the payment of full or partial benefits to the members. The report must contain any prescribed information and must also give the amount referred to in subsection (6.‍1), calculated as at the date of termination, or the amount referred to in paragraph (6.‍21)‍(b). 23 (1) Paragraph 39(1)‍(g) of the Act is replaced by the following: (g) respecting the manner in which pension benefit credits are to be determined and the time as of which the determination is to be made; (2) Subsection 39(1) of the Act is amended by adding the following after paragraph (h.‍1): (h.‍11) respecting a target benefit plan’s governance policy; (h.‍12) respecting a target benefit plan’s funding policy, including its deficit recovery plan and surplus utilization plan; (h.‍13) respecting the actuarial modelling conducted under subsection 9.‍5(1); (h.‍14) respecting the written explanation and information referred to in subsections 9.‍7(3) and (4); (h.‍15) respecting the determination and payment of the amount referred to in subsection 9.‍7(9) and the circumstances in which a payment is to be made; (3) Subsection 39(1) of the Act is amended by adding the following after paragraph (i.‍1): (i.‍11) respecting the determination of assets to be transferred under section 10.‍21; (4) Subsection 39(1) of the Act is amended by adding the following after paragraph (l): (l.‍01) respecting the notice under subsection 28.‍1(1); (5) Subsection 39(1) of the Act is amended by adding the following after paragraph (m.‍2): (m.‍21) respecting the determination and payment of the amount referred to in paragraph 29(6.‍21)‍(b) and the circumstances in which a payment is to be made; Coming into Force Order in council 24 (1) Subsection 1(2) and section 15 come into force on a day to be fixed by order of the Governor in Council. Order in council (2) Subsections 1(1) and (3) to (5) and sections 2 to 14 and 16 to 23 come into force on a day to be fixed by order of the Governor in Council, but that day must be after the day referred to in subsection (1). Published under authority of the Speaker of the House of Commons EXPLANATORY NOTES Pension Benefit Standards Act, 1985 Clause 1: (1) Existing text of the definitions: defined benefit plan means a pension plan that is not a defined contribution plan; (régime à prestations déterminées) defined benefit provision means a provision of a pension plan under which pension benefits for a member are determined in any way other than that described in the definition defined contribution provision;  (disposition à prestations déterminées) pension benefit credit, in relation to any person, means the aggregate value at a particular time of that person’s pension benefit and other benefits provided under a pension plan, calculated in prescribed manner;  (droit à pension) (2) and (3) Relevant portion of the existing text of the definition: former member, in relation to a pension plan, means (a) except in sections 9.‍2 and 24 and paragraph 28(1)‍(b.‍1), a person who, on or after January 1, 1987, has either ceased membership in the plan or retired; (b) in section 9.‍2 and paragraph 28(1)‍(b.‍1), a person who has either ceased membership in the plan or retired and has not, before the termination of the whole of the plan, (i) transferred their pension benefit credit under section 26, (ii) used their pension benefit credit to purchase a life annuity under section 26, or (iii) had their pension benefits transferred to another pension plan; or (4) and (5) New. Clause 2: (1) and (2) Relevant portion of subsection 7(1): 7 (1) The administrator of a pension plan shall be (a)  in the case of a multi-employer pension plan established under one or more collective agreements, a board of trustees or other similar body constituted in accordance with the terms of the plan or the collective agreement or agreements to manage the affairs of the plan; (b) in the case of a multi-employer pension plan not described in paragraph (a), a pension committee constituted in accordance with the terms of the plan, subject to section 7.‍1, to manage the affairs of the plan; or (c) in the case of a pension plan other than a multi-employer pension plan, Clause 3: New. Clause 4: New. Clause 5: (1) Relevant portion of subsection 8(1): 8 (1) An employer shall ensure, with respect to its pension plan, that the following amounts are kept separate and apart from the employer’s own moneys, and the employer is deemed to hold the amounts referred to in paragraphs (a) to (c) in trust for members of the pension plan, former members, and any other persons entitled to pension benefits under the plan: .‍.‍.  (c) all of the following amounts that have not been remitted to the pension fund: .‍.‍.  (ii) other amounts due to the pension fund from the employer, including any amounts that are required to be paid under subsection 9.‍14(2) or 29(6). (2) Existing text of subsection 8(6): (6) A person shall not accept an appointment to a body referred to in paragraph 7(1)‍(a) or (b) or subparagraph 7(1)‍(c)‍(ii) if there would be a material conflict of interest between that person’s role as a member of that body and that person’s role in any other capacity. Clause 6: Existing text of subsections 9(1.‍1) and (1.‍2): (1.‍1) In respect of a pension plan that is not a multi-employer pension plan, the employer shall pay into the pension fund all amounts required to meet the prescribed tests and standards for solvency. (1.‍2) In respect of a multi-employer pension plan, each participating employer shall pay into the pension fund all contributions that they are required to pay under an agreement between participating employers or a collective agreement, statute or regulation. Clause 7: New. Clause 8: Existing text of subsection 10(6): (6) Every pension plan that is filed for registration must provide for the use of surplus during the continuation of the plan and on its termination. Clause 9: New. Clause 10: (1) Relevant portion of subsection 10.‍1(2): (2) Unless the Superintendent authorizes the amendment, an amendment is void or, in Quebec, null if (2) New. Clause 11: Existing text of subsection 10.‍2(1): 10.‍2 (1) Subject to section 26, the administrator may transfer or permit the transfer of any part of the assets of the pension plan that relate to defined benefit provisions to another pension plan, including a pension plan to which this Act does not apply, only with the Superintendent’s permission. Clause 12: New. Clause 13: Existing text of subsection 12(2): (2) The administrator of a pension plan shall file with the Superintendent actuarial reports, financial statements, and any other information required by or under the regulations at any intervals or times that the Superintendent directs. Clause 14: Relevant portion of subsection 16.‍1(4): (4) During a phased retirement period .‍.‍.  (e) section 21 does not apply to the calculation of the phased retirement benefit; Clause 15: New. Clause 16: New. Clause 17: New. Clause 18: Existing text of subsection 23(1): 23 (1) In the case of the death of a member or former member of a pension plan who is entitled to a deferred pension benefit under section 17, or, in the case of a member, would be entitled to that benefit if the member ceased membership in the plan, the member’s or former member’s survivor is entitled to the pension benefit credit, calculated in accordance with section 21, to which the member or former member would have been entitled on the day of death if they had terminated employment on that day and had not died. Clause 19: Relevant portion of subsection 25(4): (4) A member or former member of a pension plan may assign all or part of their pension benefit, pension benefit credit or other benefit under the plan to their spouse, former spouse, common-law partner or former common-law partner, effective as of divorce, annulment, separation, or breakdown of the common-law partnership, as the case may be. The assignee is, in respect of the assigned portion of the pension benefit, pension benefit credit or other benefit, deemed for the purposes of this Act, except section 21, Clause 20: (1) Relevant portion of subsection 26(2): (2) Where a member, after becoming eligible to retire pursuant to subsection 16(2) but before the commencement of payment of a pension benefit, ceases to be a member of the pension plan or dies, the plan may permit the member or the survivor, as the case may be, (2) Relevant portion of subsection 26(3): (3) Where, at any time, a member ceases to be a member of the pension plan or dies, the plan may provide .‍.‍.  (b) that, if part of the pension benefit payable results from the excess described in subsection 21(1), the member or the survivor, as the case may be, must choose one of the following options in respect of that excess: (3) New. Clause 21: New. Clause 22: (1) Relevant portion of subsection 29(6): (6) If the whole of a pension plan is terminated, the employer shall, without delay, pay into the pension fund all amounts that would otherwise have been required to be paid to meet the prescribed tests and standards for solvency referred to in subsection 9(1) and, without limiting the generality of the foregoing, the employer shall pay into the pension fund (2) Existing text of subsection 29(6.‍1): (6.‍1) If the whole of a pension plan that is not a negotiated contribution plan is terminated, the employer shall pay into the pension fund, in accordance with the regulations, the amount — calculated periodically in accordance with the regulations — that is required to ensure that any obligation of the plan with respect to pension benefits, as they are determined on the date of the termination, is satisfied. (3) New. (4) Existing text of subsection 29(9): (9) On the termination of the whole or part of a pension plan, the administrator of the plan shall file with the Superintendent, in the form and manner, if any, that the Superintendent directs, a termination report prepared by a person having the prescribed qualifications, setting out the nature of the pension benefits and other benefits to be provided under the plan and a description of the methods of allocating and distributing those benefits and deciding the priorities in respect of the payment of full or partial benefits to the members. The report must also give the amount referred to in subsection (6.‍1) — calculated as at the date of termination — and contain any prescribed information. Clause 23: (1) Relevant portion of subsection 39(1): 39 (1) The Governor in Council may make regulations .‍.‍.  (g) prescribing the manner in which pension benefit credits are to be determined and fixing the time as of which the determination is to be made; (2) to (5) Relevant portion of subsection 39(1): 39 (1) The Governor in Council may make regulations