Alberta announces temporary solvency funding relief
On March 23, 2018, Alberta announced temporary solvency funding relief for defined benefit (DB) pension plans. The Alberta Superintendent of Pensions will accept applications from DB pension plan administrators to extend the solvency deficiency amortization period from five years to 10 years. An administrator is also permitted to consolidate all existing pension plan solvency deficiencies into one new deficiency.
An application for relief may be made in respect of any actuarial valuation report that has a review date between December 31, 2016, and December 31, 2019, inclusive. The filing deadline for valuation reports as at December 31, 2016, has been extended to June 29, 2018. A plan that has already filed a valuation report with a December 31, 2016 valuation date may apply for funding relief by filing additional information with the Superintendent.
The application for relief must include confirmation that members will be advised that an extension on making solvency deficiency payments has been approved by the Superintendent. No benefit improvements that increase actuarial liabilities may be made unless approved in advance by the Superintendent.
Unless the Canada Revenue Agency would deem that the contributions already made to date would cause the plan’s registration status to be revocable, all contributions already made by the plan sponsor must be retained in the plan fund. If the total amount already remitted to the pension plan exceeds what would have been required under the funding relief option, plan sponsors are permitted to cease making additional contributions until the excess contributions have been used up.