ARCHIVED — Vol. 151, No. 17 — April 29, 2017

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Regulations Amending the Pension Benefits Standards Regulations, 1985 and the Pooled Registered Pension Plans Regulations

  • Statutory authorities
    • Pension Benefits Standards Act, 1985
      Pooled Registered Pension Plans Act
  • Sponsoring department
    • Department of Finance

REGULATORY IMPACT ANALYSIS STATEMENT

(This statement is not part of the Regulations.)

Issues

Sponsors of federally regulated defined benefit pension plans are required to make solvency deficit payments into their plans. These payment amounts can be large and volatile as a result of the low interest rate environment and market volatility. The financial burden of these solvency deficit payments can impair sponsors’ capacity to invest in their businesses, and can jeopardize the long-term sustainability of their businesses and defined benefit plans alike. Currently, plan sponsors of federally regulated defined benefit plans may use the letter of credit or solvency payment reduction provisions of the Pension Benefits Standards Act, 1985 (PBSA) to reduce some of their required solvency payments. The Pension Benefits Standards Regulations, 1985 (PBSR) prescribe that plan sponsors may use these provisions to reduce their solvency payments up to a cumulative limit of 15% of plan assets. However, a number of federally regulated pension plans have reached, or are close to reaching, the current limit on the use of these provisions, which could require their plan sponsors to make large solvency payments that they may not be able to afford. For the plan sponsors that have reached the current limit, having to make large solvency payments could challenge their ability to invest in their businesses and remain profitable, thereby threatening the sustainability of their business, and by extension their defined benefit plans.

In addition, a few technical amendments to the PBSR and the Pooled Registered Pension Plans Regulations (PRPP Regulations) are needed to clarify some provisions and ensure consistency between the French and English versions. Finally, a technical amendment is needed to ensure that funds transferred to Registered Savings Plans (RSPs) can be withdrawn if the holder has a medical condition that reduces their life expectancy.

Background

Letters of credit and solvency payment reduction limits

The federal PBSA and PBSR apply to pension plans that are linked to employment that falls under federal jurisdiction. Areas of employment that fall under federal jurisdiction include work in connection with navigation and shipping, banking, interprovincial transportation and communications, and all employment in federal Crown corporations, Yukon, the Northwest Territories and Nunavut.

The PBSA requires that federally regulated pension plans fund promised benefits in accordance with the prescribed tests and standards for solvency that are set out in the PBSR. Defined benefit pension plans must file actuarial valuations using two different sets of actuarial assumptions. “Solvency valuations” use assumptions consistent with a plan being terminated and all promised benefits being paid out on the valuation date, while “going concern valuations” are based on the assumption that the plan will continue to operate. Where these valuations show a pension plan’s assets to be less than its liabilities, special payments must be made into the plan to eliminate the deficiency over a period of 5 years for solvency deficits, and 15 years for going concern deficits. Solvency funding requirements are meant to provide benefit security to members of defined benefit plans by ensuring that plans have sufficient funds to pay out the promised pension benefits to all plan members if the plan terminates.

Solvency deficits are heavily influenced by interest rates; a decrease in interest rates causes an increase in the solvency deficit of a plan. The prolonged low interest rate environment that began following the 2008 financial crisis has therefore put plan sponsors under greater financial strain to fund their solvency deficits and jeopardized the sustainability of their defined benefit plans. As a relief measure for plan sponsors from the low interest rate environment and to improve the sustainability of defined benefit plans, the federal government introduced “letters of credit” and “solvency payment reduction” provisions in 2010.

The PBSA and PBSR permit sponsors of federally regulated single-employer defined benefit pension plans to secure letters of credit from a credit-worthy financial institution in lieu of the plan sponsor making solvency deficit payments, up to a cumulative limit of 15% of plan assets. Plan sponsors pay a fee to the financial institution for the letters of credit they obtain. By reducing the required solvency deficit payments, letters of credit can make defined benefit plans more affordable, reduce the risk of employer insolvency as a result of large pension deficits payments and free up cash for productive business investments. Affordable defined benefit plans sponsored by financially healthy employers are more sustainable in the long run, so letters of credit can also help employers keep their plans open. Finally, letters of credit are held in trust for the pension plan and become due if and when the plan terminates, at which point the financial institution is responsible for paying the amount of the letters of credit into the plan. Consequently, letters of credit help protect the benefit security of plan members in the event of employer insolvency and plan termination.

Plan sponsors that are federal Crown corporations cannot obtain letters of credit for their pension plans. In the case of plan sponsors that are federal Crown corporations, solvency payment reduction provisions permit the plan sponsor to reduce its solvency payments by up to 15% of plan assets with the approval of the Minister of Finance and the Minister responsible for the Crown corporation. Crown corporations pay a fee to the Government of Canada to obtain solvency payment reductions, similar to the one paid on letters of credit. Also, similarly to letters of credit, solvency payment reductions make the defined benefit plans of Crown corporations more affordable, thereby reducing costs and freeing up cash for productive uses, which improves the financial health and efficiency of Crown corporations and the sustainability of their plans. The limits on the two provisions are the same in order to provide all sponsors of federally regulated defined benefit plans with similar relief from large solvency deficit payments.

Technical amendments

Both the PBSR and the PRPP Regulations allow non-residents (those who have lived outside of Canada for at least two years) who are no longer members of a federally regulated pension plan to transfer their funds out of the plan without being subject to the “locking-in” provisions that normally restrict the transfer options to other locked-in retirement savings plans (RSPs) [e.g. locked-in RRSPs and life income funds], where the funds cannot be withdrawn as a lump sum. However, if the funds have been transferred from a pension plan to a locked-in RSP, it is unclear in the current regulations whether these funds can be withdrawn without constraints when the holder becomes a non-resident.

The PBSR and PRPP Regulations also allow a surviving spouse, who is normally entitled to a deceased member’s benefit from a pension plan, to surrender the pension benefit and designate another beneficiary. Similarly to the above-mentioned non-resident provision, the current regulations are unclear whether this provision applies to pension benefits from an RSP.

Under certain circumstances, the PBSR allows for funds previously held in a pension plan and now held in an RSP to be transferred to a pension plan or to another RSP. However, this provision unintentionally prevents transfers from RSPs to pension plans under provincial jurisdictions, PRPPs and “excepted plans” (i.e. pension plans that are linked to employment in federal government departments and agencies). Funds held in pension plans (other than RSPs) may be transferred to the aforementioned three types of plans, so there is an inconsistency between the transfer options for funds held in pension plans and RSPs.

Finally, the PBSR and PRPP Regulations, as they are currently drafted, make it optional for RSPs to allow the withdrawal of funds when the holder has a considerably shortened life expectancy. The current provision could therefore unnecessarily prevent holders from withdrawing their funds if a medical condition substantially reduces their life expectancy.

Objectives

The objective of the proposed amendments is to further ease the burden of solvency deficit payments on the sponsors of federally regulated defined benefit plans and improve the long-term sustainability of defined benefit plans by increasing the limits on letters of credit and solvency payment reductions from 15% of assets to 15% of liabilities. For plans in deficit, liabilities exceed assets, so changing the base of the limits from assets to liabilities would grant plan sponsors additional letter of credit space and permit them to take greater solvency payment reductions. As a result, plan sponsors would be able to further reduce their solvency deficit payments, taking financial pressure off of their businesses and improving the affordability and sustainability of defined benefit plans.

The proposed technical amendments would address stakeholders’ requests for clarification of certain provisions in the PBSR and the PRPP Regulations. They would also address inconsistencies between the French and English versions of the PBSR and the PRPP Regulations, respectively, and they would ensure that these regulations do not unnecessarily prevent the holder of an RSP from withdrawing funds if a medical condition substantially reduces their life expectancy.

Description

Amending the letters of credit and solvency payment reduction limits in the PBSR

Subsection 9(13.2) of the PBSR would be amended to change the letter of credit limit from 15% of plan assets to 15% of a plan’s solvency liabilities. Additionally, subsection 9.1(2) of the PBSR that allows plans to reduce the face value of the letters of credit they hold if it is in excess of the limit, (see footnote 1) and the definition of “solvency assets” in subsection 2(1) of the PBSR would be amended to reflect the new limit of 15% of liabilities.

Section 9(13.3) of the PBSR would be amended to change the solvency reduction limit applicable to the pension plans of Crown corporations from 15% of plan assets to 15% of a plan’s solvency liabilities.

Technical amendments to the PBSR and the PRPP Regulations

The amendments to the PBSR and PRPP Regulations would clarify provisions common to both regulations that relate to the unlocking of pension benefit credits for non-residents and the waiver of a spousal death benefit. They would make these provisions applicable to funds held in RSPs that were transferred from a pension plan, in the same way that they apply to funds held in a pension plan. Therefore, non-residents would not be subject to the “locking-in” provisions when transferring funds out of an RSP, and spouses of deceased plan members would be able to surrender a pension benefit from an RSP and designate another beneficiary. Additionally, the PBSR would be amended to allow for funds previously held in a pension plan and now held in an RSP to be transferred to pension plans under provincial jurisdiction, PRPPs and “excepted plans.” This would provide consistent transfer options for pension plans and RSPs.

The proposed amendments would also amend the unlocking provisions of the PBSR and PRPP Regulations relating to shortened life expectancy to make it mandatory, as opposed to optional, for RSPs to allow the withdrawal of funds when the holder has a considerably shortened life expectancy.

Subsection 7.1(1) in the French version of the PBSR is missing a sentence that is included in the English version. This sentence would be added to the French version of the PBSR. Finally, subsection 21.1(2) in the English version of the PBSR and the equivalent subsection, 37(2), in the PRPP Regulations would be amended to ensure consistency with the French versions.

“One-for-One” Rule

The “One-for-One” Rule does not apply, as the amendments do not affect administrative costs to business.

Small business lens

The small business lens does not apply, as the amendments do not impose costs on small businesses.

Consultation

Large and volatile solvency payments can divert cash away from other productive uses, such as business investment, and can impair the profitability and sustainability of businesses that sponsor defined benefit plans. To ease these solvency funding pressures, plan sponsors and industry professionals have argued that the Government of Canada should consider basing the 15% letters of credit limit on liabilities as opposed to assets, or eliminate the limit completely, in order to provide plan sponsors with additional credit space to further reduce their solvency payments. As the amounts on letters of credit are paid to the pension plan by the issuing financial institution in the event of plan termination, they do not materially increase the risk that members’ pension benefits will not be paid in full if the plan terminates. Increasing the limits on letters of credit would therefore benefit plan sponsors without increasing the risk of members receiving benefit reductions if the plan terminates.

Crown corporations that sponsor defined benefit plans face the same solvency funding pressures as the sponsors that are private businesses. Large solvency payments can divert cash away from more productive uses by Crown corporations and increase costs, making it more difficult for Crown corporations to provide efficient, affordable services to Canadians. In the past, some Crown corporations have requested an increase to the solvency payment reduction limit in order to obtain greater relief from the requirement to make large pension payments. A third-party actuarial consulting firm has made a similar request on behalf of Crown corporations who sponsor defined benefit pension plans. Granting greater solvency payment reductions would improve the affordability of Crown corporations’ defined benefit plans, thereby reducing overall costs and contributing to the efficient operation of Crown corporations. Improving the financial health of Crown corporations and lowering their pension costs also improves the sustainability of their pension plans.

Stakeholders have requested clarifications to the provisions of the PBSR and PRPP Regulations addressed in the technical amendments.

Rationale

To provide plan sponsors of defined benefit plans with greater relief from large solvency payments, the proposed amendments would increase the limits on letters of credit and solvency payment reductions. This will help improve the affordability and sustainability of defined benefit plans in addition to benefiting plan sponsors by reducing their risk of insolvency as a result of large pension deficit payments and potentially freeing up cash for business investments.

However, excessive reliance on either of these provisions could compromise the funded position of pension plans if the limits were removed and plan sponsors ceased making solvency payments altogether. To ensure that federal solvency funding requirements continue to provide benefit security to plan members, the limits would be set at 15% of plan liabilities. Further, letters of credit and solvency payment reduction provisions are broad-based measures intended to provide comparable solvency funding relief to all sponsors of federally regulated defined benefit plans. In keeping with that intent, the proposed new limit of 15% of liabilities would continue to apply equivalently to both letters of credit and solvency payment reductions in order to maintain a level playing field between private and Crown corporations pension plans.

Additionally, the current federal provisions relating to letters of credit are more restrictive than provisions in a number of provinces. Ontario, Quebec and Nova Scotia limit the face value of letters of credit in their jurisdictions to 15% of a plan’s solvency liabilities, while Alberta, British Columbia and Manitoba impose no limit. While the intent of these amendments is not to reduce regulatory differences between federally regulated and provincially regulated pension plans, changing the federal letters of credit limit to 15% of liabilities would be consistent with the letters of credit limit for provincially regulated pension plans in Ontario, Quebec and Nova Scotia. Having no limit on letters of credit could potentially allow plan sponsors to rely too heavily on letters of credit and cease making solvency payments altogether, resulting in less actual money going into the plan.

Accordingly, the proposed new limits would strike an appropriate balance between easing the burden of solvency payments on plan sponsors and maintaining the benefit security for plan members, which is provided by having a well-funded plan under the federal solvency funding framework.

The technical amendments to the PBSR and PRPP Regulations are required to address stakeholders’ requests for clarification of some provisions of the PBSR and PRPP Regulations, and to ensure consistency between the French and English versions of the PBSR and PRPP Regulations, respectively.

Contact

Lisa Pezzack
Director
Financial Systems Division
Department of Finance Canada
90 Elgin Street, 13th Floor
Ottawa, Ontario
K1A 0G5
Email: Lisa.Pezzack@canada.ca

PROPOSED REGULATORY TEXT

Notice is given that the Governor in Council, pursuant to subsection 39(1) (see footnote a) of the Pension Benefits Standards Act, 1985 (see footnote b), and section 76 of the Pooled Registered Plans Act (see footnote c) proposes to make the annexed Regulations Amending the Pension Benefits Standards Regulations, 1985 and the Pooled Registered Pension Plans Regulations.

Interested persons may make representations concerning the proposed Regulations within 30 days days after the date of publication of this notice. All such representations must cite the Canada Gazette, Part I, and the date of publication of this notice, and be addressed to Lisa Pezzack, Director, Financial Systems Division, Department of Finance, 90 Elgin Street, 13th floor, Ottawa, Ontario K1A 0G5 (email: FIN. Pensions-Pensions.FIN@canada.ca).

Ottawa, April 13, 2017

Jurica Čapkun
Assistant Clerk of the Privy Council

Regulations Amending the Pension Benefits Standards Regulations, 1985 and the Pooled Registered Pension Plans Regulations

Pension Benefits Standards Regulations, 1985

1 The description of B in the definition solvency assets in subsection 2(1) of the Pension Benefits Standards Regulations, 1985 (see footnote 2) is replaced by the following:

B is the face value of all letters of credit in effect on the valuation date, other than those being used to fund a plan under Part 3 of the Solvency Funding Relief Regulations or Part 3 of the Solvency Funding Relief Regulations, 2009, up to a maximum of 15% of the solvency liabilities of the plan as determined at the valuation date, and

2 The portion of subsection 7.1(1) of the French version of the Regulations before paragraph (a) is replaced by the following:

7.1 (1) Avant la date d’agrément du régime, l’administrateur de celui-ci établit par écrit, en tenant compte de tous les facteurs susceptibles d’avoir un effet soit sur la capitalisation et la solvabilité du régime, soit sur la capacité de celui-ci à remplir ses obligations financières, un énoncé des politiques et des procédures de placement applicables au portefeuille de placements et de prêts — à l’exception de celles applicables à tout compte accompagné de choix —, notamment en ce qui a trait aux aspects suivants :

3 (1) Subsection 9(13.2) of the Regulations is replaced by the following:

(13.2) An employer may not act under section 9.11 of the Act if the face value of all letters of credit provided to a trustee or transferred to a trust exceeds, or would exceed, 15% of the solvency liabilities of the plan as determined at the valuation date.

(2) Paragraph 9(13.3)(c) of the Regulations is replaced by the following:

  • (c) the aggregate amount of all reductions does not exceed or would not exceed 15% of the solvency liabilities of the plan as determined at the valuation date.

4 (1) The portion of subsection 9.1(2) of the Regulations before paragraph (a) is replaced by the following:

(2) If the aggregate face value of the letters of credit held for the benefit of the plan exceeds 15% of the solvency liabilities of the plan as determined at the valuation date and if, based on the most recent actuarial report,

(2) Subparagraph 9.1(2)(a)(i) of the Regulations is replaced by the following:

  • (i) the amount by which the aggregate face value of the letters of credit exceeds 15% of the solvency liabilities of the plan as determined at the valuation date, and

5 (1) Subparagraph 20(1)(a)(ii) of the Regulations is replaced by the following:

  • (ii) transferred to a plan, including any pension plan referred to in subsection 26(5) of the Act, if the plan permits such a transfer and if the plan administers the benefit attributed to the transferred funds as if the benefit were that of a plan member with two years of membership in the plan,

(2) Subsection 20(1) of the Regulations is amended by striking out “and” at the end of paragraph (c) and by adding the following after paragraph (d):

  • (e) the holder of the locked-in registered retirement savings plan who has ceased to be a resident of Canada for at least two years may withdraw any amount from that plan; and
  • (f) the survivor of the holder of the locked-in registered retirement savings plan may surrender, in writing, the funds to which the survivor is entitled under paragraph (b) and designate a beneficiary who is a dependant, within the meaning of subsection 8500(1) of the Income Tax Regulations, of the survivor or holder.

(3) Subsection 20(4) of the Regulations is replaced by the following:

(4) A locked-in registered retirement savings plan shall provide that, where a physician certifies that owing to mental or physical disability the life expectancy of the holder of the plan is likely to be shortened considerably, the funds may be paid to the holder in a lump sum.

6 (1) Subparagraph (i) of the description of F in paragraph 20.1(1)(d) of the Regulations is replaced by the following:

  • (i) for the first 15 years after January 1 of the year in which the life income fund is valued, is less than or equal to the monthly average yield on Government of Canada marketable bonds of maturity over 10 years, as published by the Bank of Canada, for the month of November before the beginning of the calendar year, and

(2) Subsection 20.1(1) of the Regulations is amended by striking out “and” at the end of paragraph (l) and by adding the following after paragraph (m):

  • (n) provide that the holder of the life income fund who has ceased to be a resident of Canada for at least two years may withdraw any amount from that fund; and
  • (o) provide that the survivor of the holder of the life income fund may surrender, in writing, the funds to which the survivor is entitled under paragraph (i) and designate a beneficiary who is a dependant, within the meaning of subsection 8500(1) of the Income Tax Regulations, of the survivor or holder.

(3) Subsection 20.1(3) of the Regulations is replaced by the following:

(3) A life income fund shall provide that, where a physician certifies that, owing to mental or physical disability, the life expectancy of the holder of the life income fund is likely to be shortened considerably, the funds in the life income fund may be paid to the holder in a lump sum.

7 (1) Subparagraph 20.2(1)(a)(ii) of the Regulations is replaced by the following:

  • (ii) transferred to a plan, including any pension plan referred to in subsection 26(5) of the Act, if the plan permits such a transfer and if the plan administers the benefit attributed to the transferred funds as if the benefit were that of a plan member with two years’ membership in the plan,

(2) Subsection 20.2(1) of the Regulations is amended by striking out “and” at the end of paragraph (d) and by adding the following after paragraph (e):

  • (f) the holder of the restricted locked-in savings plan who has ceased to be a resident of Canada for at least two years may withdraw any amount from that plan; and
  • (g) the survivor of the holder of the restricted locked-in savings plan may surrender, in writing, the funds to which the survivor is entitled under paragraph (b) and designate a beneficiary who is a dependant, within the meaning of subsection 8500(1) of the Income Tax Regulations, of the survivor or holder.

(3) Subsection 20.2(4) of the Regulations is replaced by the following:

(4) A restricted locked-in savings plan shall provide that, if a physician certifies that owing to mental or physical disability the life expectancy of the holder of the plan is likely to be shortened considerably, the funds may be paid to the holder in a lump sum.

8 (1) Subparagraph (i) of the description of F in paragraph 20.3(1)(d) of the Regulations is replaced by the following:

  • (i) for the first 15 years after January 1 of the year in which the life income fund is valued, is less than or equal to the monthly average yield on Government of Canada marketable bonds of maturity over 10 years, as published by the Bank of Canada, for the month of November before the beginning of the calendar year, and

(2) Subsection 20.3(1) of the Regulations is amended by striking out “and” at the end of paragraph (m) and by adding the following after paragraph (n):

  • (o) provide that the holder of the restricted life income fund who has ceased to be a resident of Canada for at least two years may withdraw any amount from that fund; and
  • (p) the survivor of the holder of the restricted life income fund may surrender, in writing, the funds to which the survivor is entitled under paragraph (i) and designate a beneficiary who is a dependant, within the meaning of subsection 8500(1) of the Income Tax Regulations, of the survivor or holder.

(3) Subsection 20.3(3) of the Regulations is replaced by the following:

(3) A restricted life income fund shall provide that, if a physician certifies that owing to mental or physical disability the life expectancy of the holder of the fund is likely to be shortened considerably, the funds in that fund may be paid to the holder in a lump sum.

9 Paragraph (a) of the description of F in subsection 21.1(2) of the English version of the Regulations is replaced by the following:

  • (a) for each of the first 15 years, not more than the monthly average yield on Government of Canada marketable bonds of maturity over 10 years, as published by the Bank of Canada, for the month of November before the beginning of the calendar year, and

Pooled Registered Pension Plans Regulations

10 Paragraph (a) of the description of F in subsection 37(2) of the English version of the Pooled Registered Pension Plans Regulations (see footnote 3) is replaced by the following:

  • (a) for each of the first 15 years, not more than the monthly average yield on Government of Canada marketable bonds of maturity over 10 years, as published by the Bank of Canada, for the month of November before the beginning of the calendar year; and

11 (1) Subsection 38(1) of the Regulations is amended by striking out “and” at the end of paragraph (d) and by adding the following after paragraph (e):

  • (f) provides that the holder of the locked-in RRSP who has ceased to be a resident of Canada for at least two years may withdraw any amount from that plan; and
  • (g) provides that the survivor of the holder of the locked-in RRSP may surrender, in writing, the funds to which the survivor is entitled under paragraph (b) and designate a beneficiary who is a dependant, within the meaning of subsection 8500(1) of the Income Tax Regulations, of the survivor or holder.

(2) Subsection 38(3) of the Regulations is replaced by the following:

Lump sum

(3) The locked-in RRSP shall provide that the funds may be paid to the holder in a lump sum if a physician certifies that, owing to mental or physical disability, the holder’s life expectancy is likely to be considerably shortened.

12 (1) Subsection 39(1) of the Regulations is amended by striking out “and” at the end of paragraph (e) and by adding the following after paragraph (f):

  • (g) provide that the holder of the restricted locked-in savings plan who has ceased to be a resident of Canada for at least two years may withdraw any amount from that plan; and
  • (h) provide that the survivor of the holder of the restricted locked-in savings plan may surrender, in writing, the funds to which the survivor is entitled under paragraph (b) and designate a beneficiary who is a dependant, within the meaning of subsection 8500(1) of the Income Tax Regulations, of the survivor or holder.

(2) Subsection 39(2) of the Regulations is replaced by the following:

Lump sum

(2) The restricted locked-in savings plan shall provide that the funds may be paid to the holder in a lump sum if a physician certifies that, owing to mental or physical disability, the holder’s life expectancy is likely to be considerably shortened.

13 (1) Subsection 40(1) of the Regulations is amended by striking out “and” at the end of paragraph (k) and by adding the following after paragraph (l):

  • (m) provides that the holder of the restricted life income fund who has ceased to be a resident of Canada for at least two years may withdraw any amount from that fund; and
  • (n) provides that the survivor of the holder of the restricted life income fund may surrender, in writing, the funds to which the survivor is entitled under paragraph (h) and designate a beneficiary who is a dependant, within the meaning of subsection 8500(1) of the Income Tax Regulations, of the survivor or holder.

(2) Subsection 40(2) of the Regulations is replaced by the following:

Lump sum

(2) The restricted life income fund shall provide that the funds may be paid to the holder in a lump sum if a physician certifies that, owing to mental or physical disability, the holder’s life expectancy is likely to be considerably shortened.

14 (1) Subsection 41(1) of the Regulations is amended by striking out “and” at the end of paragraph (j) and by adding the following after paragraph (k):

  • (l) provides that the holder of the life income fund who has ceased to be a resident of Canada for at least two years may withdraw any amount from that fund; and
  • (m) provides that the survivor of the holder of the life income fund may surrender, in writing, the funds to which the survivor is entitled under paragraph (h) and designate a beneficiary who is a dependant, within the meaning of subsection 8500(1) of the Income Tax Regulations, of the survivor or holder.

(2) Subsection 41(2) of the Regulations is replaced by the following:

Lump sum

(2) The life income fund shall provide that the funds may be paid to the holder in a lump sum if a physician certifies that, owing to mental or physical disability, the holder’s life expectancy is likely to be considerably shortened.

Coming into Force

15 These Regulations come into force on the day on which they are registered.

[17-1-o]

  • Footnote 1
    Since the new limit would be based on liabilities, if liabilities decreased, then the dollar limit would also decrease. Therefore, it is possible for a plan holding letters of credit to exceed the limit after its liabilities decrease. In that case, the plan would need to reduce the face value of its letters of credit.
  • Footnote a
    S.C. 2016, c. 7, s. 206
  • Footnote b
    R.S., c. 32 (2nd Supp.)
  • Footnote c
    S.C. 2012, c. 16
  • Footnote 2
    SOR/87-19
  • Footnote 3
    SOR/2012-294