Solvency Funding Relief Regulations, 2009

Solvency Funding Relief Regulations, 2009 Her Excellency the Governor General in Council, on the recommendation of the Minister of Finance, pursuant to the definition “surplus”a in subsection 2(1), subsection 9(1), paragraph 10.1(2)(b)b, subsection 12(3), paragraphs 28(1)(b)c and 29(6)(a) and section 39d of the Pension Benefits Standards Act, 1985e, hereby makes the annexed Solvency Funding Relief Regulations, 2009. S.C. 1998, c. 12, s. 1(4) S.C. 1998, c. 12, s. 10 S.C. 2000, c. 12, par. 263(d) S.C. 2001, c. 34, s. 76 R.S., c. 32 (2nd Supp.) The following definitions apply in these Regulations. acceptable rating means the rating given by a credit rating agency to an issuer at the time of the issuance or renewal of a letter of credit that is at least equal to one of the following ratings: A, from Dominion Bond Rating Service Limited; A, from Fitch Ratings; A2, from Moody’s Investors Service; or A, from Standard & Poor’s Ratings Services. (note acceptable) Act means the Pension Benefits Standards Act, 1985. (Loi) bank means a bank or authorized foreign bank, as defined in section 2 of the Bank Act. (banque) beneficiary means a member or former member of a plan or any person who is entitled to pension benefits under the plan except a former member who has transferred or has chosen to transfer their pension benefit credit under section 26 of the Act; and a former member for whom the administrator has purchased an immediate or deferred life annuity. (bénéficiaire) beneficiary representative means a union representative or court-appointed representative of a beneficiary. (représentant des bénéficiaires) cooperative credit society means a cooperative credit society to which the Cooperative Credit Associations Act applies or a cooperative credit society that is incorporated and regulated by or under an Act of the legislature of a province. (coopérative de crédit) Crown Corporation means a Crown corporation that is an agent of Her Majesty in right of Canada in respect of which employment has not been excepted from included employment by a regulation made under subsection 4(6) of the Act. (société d’État) default means the occurrence of one of the following: the written notification to the Superintendent that the administrator intends to terminate or wind up the whole plan under subsection 29(5) of the Act; the amendment of the plan, resolution by the employer or coming into force of any other measure that effects the termination of the whole plan; the Superintendent’s declaration under subsection 29(2) or (2.1) of the Act that terminates the whole plan; the filing of any application or petition by the employer, or against the employer, under the Companies’ Creditors Arrangement Act, the Bankruptcy and Insolvency Act or the Winding-up and Restructuring Act; the termination of the whole plan; the non-renewal of a letter of credit referred to in Part 3 for its full face amount unless it has been replaced by another letter of credit for the same face amount at least 30 days before the beginning of the following plan year, an amount equal to the face amount of the letter of credit has been remitted to the pension fund at least 30 days before the beginning of the following plan year, or the face amount of the letter of credit has been reduced in accordance with section 28; or the failure by an employer to comply with a direction issued by the Superintendent under section 11 of the Act with respect to the face amount of the letters of credit required by subsection 21(3). (défaut) deficiency means a 2008 solvency deficiency or a solvency deficiency referred to in subsection 5(1) or 21(1) or (2). (déficit) holder means a trust company that is licensed to carry on business in Canada and that has entered into a trust agreement with the employer or, if the employer is not the administrator, with the employer and the administrator. (détenteur) issuer means a bank or cooperative credit society that is given an acceptable rating by two credit rating agencies and that is not the employer or affiliated with the employer within the meaning of subsection 2(2) of the Canada Business Corporations Act. (émetteur) solvency shortfall means the amount, calculated as at the 2008 plan year end, by which the liabilities of the plan, determined on the basis that the plan is terminated or on a basis that is certified by an actuary to be reasonably approximate to a termination basis, and that takes into account any significant increases or decreases in benefits to the plan members as a result of the termination, exceed the total of the aggregate of the value of the assets of the plan, determined on the basis of market value or of a value related to the market value by means of a method using market values over a period of not more than five years to stabilize short-term fluctuations, and the present value of a special payment in respect of a solvency deficiency that emerged before the 2008 plan year end and that was calculated, as the case may be, in accordance with section 9 of the Pension Benefits Standards Regulations, 1985, section 9 or 13 of the Air Canada Pension Plan Solvency Deficiency Funding Regulations or section 5, 6, 7 or 19 of the Solvency Funding Relief Regulations. (déficit à combler) special payment means a payment or one of a series of payments that is determined in accordance with section 9 of the Pension Benefits Standards Regulations, 1985, section 9 or 13 of the Air Canada Pension Plan Solvency Deficiency Funding Regulations, section 5, 6, 7 or 19 of the Solvency Funding Relief Regulations or section 5 or 21 of these Regulations. (paiement spécial) 2008 solvency deficiency means the solvency deficiency of a plan that emerged on the date on which the valuation that identified the deficiency was performed, as reported in the first actuarial report filed with the Superintendent after the coming into force of these Regulations, and that values the plan as at a date that is in the period beginning on November 1, 2008 and ending on October 31, 2009. (déficit de solvabilité pour l’année 2008) 2008 plan year means the plan year that ends no later than October 31, 2009. (exercice 2008) 2009 plan year means the plan year that ends no later than October 31, 2010. (exercice 2009) Except as otherwise provided, words and expressions used in these Regulations have the same meaning as in the Pension Benefits Standards Regulations, 1985. These Regulations apply to the funding of a defined benefit plan and, except as otherwise provided, the Pension Benefits Standards Regulations, 1985 also apply to the funding of a plan under these Regulations. For the purposes of these Regulations, a 2008 solvency deficiency shall be calculated in accordance with the definition solvency deficiency in subsection 9(1) of the Pension Benefits Standards Regulations, 1985 and that definition shall be interpreted, in its paragraph (d), as including the present value of any special payments that are due in the next 10 years and that have been determined before the emergence of the 2008 solvency deficiency. In the case of an inconsistency between these Regulations and the Pension Benefits Standards Regulations, 1985, these Regulations prevail. These Regulations do not apply to a solvency deficiency that emerges as the result of Air Canada electing to fund a plan in accordance with Part 2 of the Air Canada Pension Plan Solvency Deficiency Funding Regulations other than in respect of a 2008 solvency deficiency that emerges as at the end of the 2008 plan year, despite section 21 of those Regulations. Plans may only be funded under these Regulations if all of the payments that are owed to the pension fund before the day on which the deficiency emerges, as required by subsection 9(14) of the Pension Benefits Standards Regulations, 1985, have been made as at the filing date of the actuarial report that shows the emergence of that deficiency. Despite section 8 of the Pension Benefits Standards Regulations, 1985, the funding of a plan shall be considered to meet the standards for solvency if the funding is in accordance with Part 1, 2 or 3 of these Regulations. Despite subsection 9(4) of the Pension Benefits Standards Regulations, 1985 and section 13 of the Air Canada Pension Plan Solvency Deficiency Funding Regulations, a solvency deficiency, as defined in subsection 9(1) of the Pension Benefits Standards Regulations, 1985, of a plan that emerged at the end of the 2008 plan year may be funded in accordance with section 9 of those Regulations but the remittance to the pension fund of a portion of the special payments determined in accordance with those Regulations may be made in accordance with subsection (2) or (3), as the case may be. If the actuarial report that values the plan as at the end of the 2008 plan year indicates that there is a 2008 solvency deficiency and that there is a solvency deficiency as defined in subsection 9(1) of the Pension Benefits Standards Regulations, 1985, a portion of the special payments determined in accordance with subsection 9(4) of those Regulations or section 13 of the Air Canada Pension Plan Solvency Deficiency Funding Regulations may be paid to the pension fund as if the 2008 solvency deficiency were funded by special payments sufficient to liquidate the 2008 solvency deficiency by equal annual payments over a period not exceeding 10 years from the day on which the 2008 solvency deficiency emerged. If the actuarial report that values the plan as at the end of the 2008 plan year indicates that there is no 2008 solvency deficiency but that there is a solvency deficiency as defined in subsection 9(1) of the Pension Benefits Standards Regulations, 1985, the special payments determined in accordance with subsection 9(4) of those Regulations or section 13 of the Air Canada Pension Plan Solvency Deficiency Funding Regulations may be paid to the pension fund provided that those special payments result in the solvency shortfall being funded and liquidated over a period not exceeding 10 years from the day on which the solvency shortfall was calculated. For the purposes of subsection 8(1) of the Act, if the 2008 solvency deficiency or solvency shortfall, as the case may be, is calculated by valuing the assets of a plan in excess of 110% of market value as at the date on which the valuation that identified the 2008 solvency deficiency or solvency shortfall was performed, the amount by which the aggregate amount of special payments calculated using a value of assets equal to 110% of market value on that date exceeds the aggregate amount of special payments calculated using a value of assets in excess of 110% of market value on that date shall be considered to be an amount accrued to the pension fund. The amount that was accrued as a result of subsection (4) is considered to have been paid to the plan at the end of the fifth plan year after the end of the 2009 plan year by special payments that have been calculated in accordance with these Regulations and section 9 of the Pension Benefits Standards Regulations, 1985 provided that all those payments have been made to the fund by the end of that plan year. If the funding is for a deficiency of a multi-employer pension plan and if the annual amount of the payments required to be made to the pension fund in accordance with subsection (2) or (3), as the case may be, is less than the aggregate amount of the payments that are required to be made to the pension fund, excluding the normal cost and the special payments required to liquidate an unfunded liability, under all applicable collective agreements, the amount of the payments required to be made to the pension fund in accordance with subsection (2) or (3), as the case may be, shall be the aggregate amount of the payments required to be made to the pension fund under all applicable collective agreements and subsection (4) shall not apply. Before funding the deficiency in accordance with this Part, the administrator shall file the following documents with the Superintendent: written notification that the deficiency is to be funded in accordance with section 5; and the actuarial report valuing the plan as at the day on which the deficiency emerged. For the purposes of paragraph 10.1(2)(b) of the Act, the prescribed solvency ratio level for the 2009 plan year is the solvency ratio calculated on the basis of the actuarial report that reported the deficiency. If Parts 2 and 3 do not apply, section 9 of the Pension Benefits Standards Regulations, 1985 or section 13 of the Air Canada Pension Plan Solvency Deficiency Funding Regulations, as the case may be, applies in respect of the plan after the 2008 plan year except as otherwise provided in this Part. In respect of the 2009 plan year, the solvency deficiency and solvency special payments shall be determined in accordance with section 9 of the Pension Benefits Standards Regulations, 1985. [Repealed, SOR/2010-149, s. 18] For the purposes of this Part, despite paragraph 9(4)(c) of the Pension Benefits Standards Regulations, 1985, if there is a solvency deficiency, a plan shall be funded in each plan year by annual solvency special payments equal to the amount by which the solvency deficiency divided by 5 exceeds the amount of going concern special payments — other than those referred to in paragraph 14(1)(c) — that are payable during the plan year; and unfunded liability means the going concern deficit of a plan as determined on the date that the plan was established; the amount by which an increase in the going concern liabilities of a plan resulting from an amendment to the plan exceeds the going concern excess of the plan as determined on the day before the effective date of the amendment; or the amount by which the going concern deficit of a plan determined at the valuation date exceeds the sum of the present value of going concern special payments established in respect of periods after the valuation date, and the present value of special payments referred to in paragraph 14(1)(b). The deficiency of a plan may continue to be funded in accordance with Part 1 after the 2009 plan year only if less than one third of the members and less than one third of the beneficiaries excluding members object before the date indicated in the statement referred to in paragraph 10(1)(j). Any objection expressed by a beneficiary representative on behalf of the persons that they represent shall be counted as a separate objection for each person that they represent. Subject to subsection (2), the administrator shall provide the following information to the beneficiaries: the solvency ratio of the plan as at the day on which the deficiency funded in accordance with section 5 emerged; the amount of the deficiency to be funded in accordance with this Part; a description of the extent to which the beneficiaries’ benefits would be reduced if the plan were fully terminated and wound up with the solvency ratio referred to in paragraph (a); a statement indicating that extending the period for funding the deficiency as permitted by this Part may result in a lower value of the plan assets during the funding period than would be the case if the deficiency were funded over a period not exceeding five years and that the longer funding period may also extend the period during which the plan assets are less than the plan liabilities; the special payments that would have been made during the first plan year covered by the actuarial report referred to in paragraph 6(b) if the deficiency were to be funded in accordance with section 9 of the Pension Benefits Standards Regulations, 1985; the special payments in respect of the deficiency that will be made during the 2009 plan year; [Repealed, SOR/2015-60, s. 43] a statement indicating that the plan may continue to be funded in accordance with this Part following the 2009 plan year end only if less than one third of the members object and less than one third of the beneficiaries excluding members object; a statement indicating that the Superintendent’s approval is not required to fund the deficiency in accordance with this Part; a statement indicating that the beneficiaries may object to the proposal to fund the plan in accordance with this Part by sending an objection to the administrator at the address and by the date indicated in the statement, which date shall not be less than 30 days after the day on which the other information required to be provided under this subsection is provided by the administrator; a statement indicating that amendments to the plan that increase the pension benefits have been restricted during the 2009 plan year and that, if the deficiency of the plan is funded in accordance with this Part, those benefits will continue to be restricted for the following four plan years of funding following the 2009 plan year end; and a statement setting out the right of access to the documents described in paragraph 28(1)(c) of the Act. If a beneficiary is represented by a beneficiary representative, the administrator shall provide the information set out in subsection (1) to the beneficiary representative. If a beneficiary representative has the authority to act on behalf of a beneficiary with respect to any matter under this Part, the administrator shall deal with the beneficiary representative. If the plan is to be funded in accordance with this Part, the administrator shall file the following documents with the Superintendent within 60 days after the end of the 2009 plan year: other than in the case of a multi-employer pension plan, a written statement confirming that a resolution of the board of directors of the employer has been passed, if the employer is a corporation, or, if the employer is not a corporation, an approval of the persons who have the authority to direct or authorize the actions of that body has been given, authorizing the special payment schedule calculated in accordance with this Part; a written statement confirming that the information set out in subsection 10(1) has been provided to the beneficiaries or to the beneficiary representatives; and a written statement confirming that less than one third of the members have objected and less than one third of the beneficiaries excluding members have objected. For the purposes of paragraph 10.1(2)(b) of the Act, the prescribed solvency ratio level for the first five plan years of funding in accordance with Part 1 and this Part is the solvency ratio calculated on the basis of the most recent actuarial report. Despite section 9 of the Pension Benefits Standards Regulations, 1985, a solvency deficiency that emerges after the day on which the initial solvency deficiency emerged shall be calculated as the amount by which the solvency liabilities exceed the sum of the following amounts: the adjusted solvency asset amount, the present value of special payments made under section 5 if at least one of those payments is due more than five years after the valuation date, and the present value of the going concern special payments that were used to fund the initial solvency deficiency that are due during the period beginning on the valuation date and ending on the 10th anniversary of the date of emergence of the initial solvency deficiency if at least one of those payments is due more than five years after the valuation date. The interest rate used to determine the present value of the special payments referred to in subsection (1) is the same as the interest rate used to determine the solvency liabilities. If a plan is fully terminated and on the day on which it is terminated the liabilities of the plan exceed its assets, the lesser of the amounts determined under subsection 5(4) and the amount by which the liabilities of the plan exceed its assets shall immediately be remitted to the pension fund. A plan may cease to be funded in accordance with this Part, beginning on the first day of a plan year, by the administrator giving written notice to the Superintendent not later than six months after the beginning of that plan year. The notice shall indicate whether the plan has a surplus on the first day of the plan year. If funding ceases, section 9 of the Pension Benefits Standards Regulations, 1985 applies in respect of the plan except as otherwise provided in this Part. A surplus in respect of a plan shall be determined in the manner set out in subsection 16(1) of the Pension Benefits Standards Regulations, 1985 as if the plan had been fully terminated. If a plan ceases to be funded in accordance with this Part and the plan has a surplus on the first day of the plan year, this Part ceases to apply to the plan on the first day of that plan year. If a plan ceases to be funded in accordance with this Part and the plan does not have a surplus on the first day of the plan year, section 9 of the Pension Benefits Standards Regulations, 1985 applies to the plan except as follows: when funding ceases before the sixth plan year, the administrator shall have an actuarial report prepared — in which the present value of the special payments referred to in section 5 shall be zero — valuing the plan as at the first day of the plan year in which funding ceases, the amount by which the aggregate amount of special payments that would have been made to the pension fund in accordance with section 9 of the Pension Benefits Standards Regulations, 1985 from the day on which the deficiency emerged to the day on which funding ceases, as adjusted to take into account the reductions in special payments resulting from the application of those Regulations, plus interest, exceeds the aggregate amount of special payments made to the pension fund in accordance with Part 1 and this Part, plus interest, shall immediately be remitted to the pension fund, and [Repealed, SOR/2010-149, s. 21] the special payments referred to in section 5 shall continue to be made until the first special payment required to fund the remaining deficiency referred to in subparagraph (iii) is made to the pension fund; and when funding ceases after the fifth plan year, the administrator shall have an actuarial report prepared as at the first day of the plan year in which funding ceases, and the amount by which the aggregate amount of special payments that would have been made to the pension fund in accordance with section 9 of the Pension Benefits Standards Regulations, 1985 from the day on which the deficiency emerged to the day on which funding ceases, as adjusted to take into account the reductions in special payments resulting from the application of those Regulations, plus interest, exceeds the aggregate amount of special payments made to the pension fund in accordance with Part 1 and this Part, plus interest, shall immediately be remitted to the pension fund. The administrator of a plan of a Crown Corporation with a deficiency that is funded in accordance with this Part shall not have to comply with sections 9, 10 and 12 if the administrator files the following documents with the Superintendent: the actuarial report valuing the plan as at the day on which the deficiency emerged; a written statement confirming that a resolution of the board of directors of the Crown Corporation has been passed authorizing the special payment schedule calculated in accordance with this Part; a written statement confirming that the board of directors of the Crown Corporation has notified the Minister and the Minister responsible for the Crown Corporation of the decision that the deficiency is to be funded in accordance with this Part; and a copy of letters from the Minister and the Minister responsible for the Crown Corporation acknowledging that they have been informed of the fact that the Crown Corporation intends to fund the deficiency in accordance with this Part. When the administrator provides the written statement under paragraph 28(1)(b) of the Act, the administrator shall also indicate the amount of the deficiency and that the deficiency is to be funded in accordance with this Part by equal annual payments over a period not exceeding 10 years. Section 13 shall not apply in respect of a plan if the documents set out in subsection (1) are filed with the Superintendent. despite paragraph 9(4)(c) of the Pension Benefits Standards Regulations, 1985, if there is a solvency deficiency, a plan shall be funded in each plan year by annual solvency special payments equal to the amount by which the solvency deficiency divided by 5 exceeds the amount of going concern special payments — other than those referred to in paragraph 29(1)(c) — that are payable during the plan year; and the present value of special payments referred to in paragraph 29(1)(b). Despite subsection 9(4) of the Pension Benefits Standards Regulations, 1985 and section 13 of the Air Canada Pension Plan Solvency Deficiency Funding Regulations, if the actuarial report that values a plan as at the end of the 2008 plan year indicates that there is a 2008 solvency deficiency and that there is a solvency deficiency, as defined in subsection 9(1) of the Pension Benefits Standards Regulations, 1985, the 2008 solvency deficiency may be funded by special payments sufficient to liquidate that deficiency by equal annual payments over a period not exceeding 10 years from the day on which the 2008 solvency deficiency emerged. If the actuarial report that values the plan as at the end of the 2008 plan year indicates that there is no 2008 solvency deficiency but that there is a solvency deficiency as defined in subsection 9(1) of the Pension Benefits Standards Regulations, 1985, the solvency deficiency may be funded by special payments sufficient to liquidate the solvency shortfall of the plan over a period not exceeding 10 years from the day on which that solvency shortfall was calculated. The deficiency may be funded in accordance with this Part if the employer obtains letters of credit up to the end of the fifth plan year of funding under this Part, for the amount representing the difference between the present value, at the end of each plan year, of the remaining special payments that are required to be made to liquidate the 2008 solvency deficiency or solvency shortfall, as the case may be, under this Part and the present value of the remaining special payments that would have been required to be made to liquidate the corresponding 2008 solvency deficiency or solvency shortfall, as the case may be, as if it had been funded under section 9 of the Pension Benefits Standards Regulations, 1985; and maintains letters of credit for the sixth plan year of funding and for each plan year after that year, for the amount representing the present value at the beginning of each plan year of the remaining special payments under this Part. The present value of the remaining special payments shall be determined by using the interest rate that was assumed in valuing the liabilities of the plan for the purpose of calculating the deficiency. A letter of credit required by this Part shall be an irrevocable, unconditional standby letter of credit that is in accordance with the rules of International Standby Practices 1998 (publication No. 590 of the International Chamber of Commerce), as amended from time to time; is payable only in Canadian currency; is issued or confirmed by an issuer who is a member of the Canadian Payments Association; and provides that the letter of credit is made out to the holder’s benefit, the issuer will pay the face amount of the letter of credit on demand from the holder without inquiring whether the holder has a right to make the demand, the bankruptcy of the employer shall have no effect on the rights and obligations of the issuer and the holder set out in the letter of credit, the letter of credit will expire on the day on which the plan’s year ends, the letter of credit will automatically be renewed for the full face amount for further one-year periods on the expiry date referred to in subparagraph (iv) unless the issuer notifies the holder, in writing, of the non-renewal not less than 90 days before the expiry date, and the letter of credit may not be amended, except to increase the face amount, during the term of the letter of credit and may not be assigned except to another holder. The initial letter of credit for funding under this Part shall be obtained by the end of the 2009 plan year and each subsequent letter of credit shall be obtained at least 30 days before the beginning of each subsequent plan year that is covered by it. The letter of credit shall immediately be provided to the holder. Subsection 5(4) shall not apply in respect of a plan if the letters of credit are obtained in accordance with this Part. If separate letters of credit have been obtained for each plan year, a letter of credit is not required to be automatically renewed after the fifth year following the plan year for which it was obtained. If the face amount of letters of credit obtained or maintained in accordance with this Part for a plan year is less than the amount required by subsection 21(3) for that plan year, the employer shall make up the difference either by increasing the amount of letters of credit or by making additional payments to the pension fund no later than on the day on which the next payment is made to the pension fund in accordance with subsection 9(14) of the Pension Benefits Standards Regulations, 1985. The employer and, if the employer is not the administrator of the plan, the administrator shall enter into a trust agreement or may amend any existing trust agreement they may have with the holder regarding the letters of credit referred to in this Part. The trust agreement shall provide that the holder shall hold the letters of credit in Canada in trust for the plan; the definition default in subsection 1(1) applies to the agreement; the employer shall immediately notify, in writing, the holder, the Superintendent and, if the employer is not the administrator of the plan, the administrator of a default; if not otherwise notified under paragraph (c), the administrator shall notify, in writing, the holder and the Superintendent of a default immediately after becoming aware of it; on receipt of the notice referred to in paragraph (c) or (d), the holder shall immediately make a demand for payment of the face amount of all of the letters of credit held in respect of the plan; on receipt of a written notice of default from any person other than the employer or the administrator, the holder shall immediately notify, in writing, the employer, the administrator and the Superintendent of the notice, and make a demand for payment of the face amount of all of the letters of credit held in respect of the plan unless the administrator provides a written notice to the holder within 30 days after receipt of the notice that the default has not occurred; when a holder makes a demand for payment of a letter of credit held in respect of the plan, it shall notify, in writing, the employer, the administrator and the Superintendent that it has made the demand; the holder shall immediately notify, in writing, the employer, the administrator and the Superintendent if the issuer does not pay the face amount of a letter of credit after a demand for payment has been made; the holder shall not make a demand for payment if a letter of credit expires without being renewed, or the face amount is being reduced, in accordance with this Part; the administrator shall notify the holder of any circumstance in which a letter of credit may expire or the face amount of a letter of credit may be reduced in accordance with this Part; and the administrator shall provide the holder with a copy of the statements referred to in paragraph 26(1)(e) and subsection 26(2) and with a copy of the written notice referred to in paragraph 32(a). [Repealed, SOR/2015-60, s. 49] When the administrator provides the written statement under paragraph 28(1)(b) of the Act, the administrator shall also provide the following information: the amount of the 2008 solvency deficiency or the solvency deficiency calculated in accordance with the definition solvency deficiency in subsection 9(1) of the Pension Benefits Standards Regulations, 1985, as the case may be, that is being funded under this Part; the fact that the deficiency is to be funded in accordance with this Part by equal annual payments over a period not exceeding 10 years; and the aggregate face amount of all of the letters of credit that are held by the holder in respect of the plan. The face amount of a letter of credit may be reduced, effective the beginning of a plan year, by the amount by which the aggregate amount of payments that the employer has made to the pension fund in the previous plan year exceeds the total of the annual special payments made in accordance with this Part and the normal cost of the plan for that year as shown in the actuarial report; or the amount by which the aggregate face amount of all of the letters of credit that are held by the holder in respect of the plan exceeds the amount referred to in paragraph 21(3)(a) or (b), as the case may be. The face amount of the letter of credit shall not be reduced following a default. the present value of special payments made under section 21 if at least one of those payments is due more than five years after the valuation date, and On receipt of the notice from a holder that an issuer has not paid the face amount of a letter of credit after a demand for payment has been made, the employer shall remit to the pension fund, no later than 30 days after the day on which the demand for payment was made, an amount equal to the face amount of that letter of credit. If a default occurs, the amount by which the aggregate amount of special payments that would have been made to the pension fund in accordance with section 9 of the Pension Benefits Standards Regulations, 1985 from the day on which the deficiency emerged, as adjusted to take into account the reductions in special payments resulting from the application of those Regulations, plus interest, exceeds the aggregate amount of special payments made to the pension fund in accordance with Part 1 and this Part, plus interest, shall immediately be remitted to the pension fund. Except if a plan is fully terminated, the administrator shall have an actuarial report prepared — in which the present value of the special payments referred to in subsection 21(1) shall be zero — valuing the plan as at the last day of the plan year in which the default occurs. Any remaining deficiency disclosed by the actuarial report prepared in accordance with subsection (2), which shall be calculated by including as an asset any amount remitted in accordance with subsection (1), shall be considered to have emerged on the day on which the deficiency emerged. The remaining deficiency calculated under subsection (3) shall be funded by special payments sufficient to liquidate that deficiency by equal annual payments over a period not exceeding five years minus the number of years that the plan was funded in accordance with Part 1 and this Part. A plan may cease to be funded in accordance with this Part, beginning on the first day of a plan year, if the administrator gives written notice to the Superintendent not later than six months after the beginning of that plan year; the amount by which the aggregate amount of special payments that would have been made to the pension fund in accordance with section 9 of the Pension Benefits Standards Regulations, 1985 from the day on which the deficiency emerged, as adjusted to take into account the reductions in special payments resulting from the application of those Regulations, plus interest, exceeds the aggregate amount of special payments made to the pension fund in accordance with Part 1 and this Part, plus interest, is remitted to the pension fund at least 30 days before the plan’s year end; and an actuarial report is prepared in accordance with subsection 31(2) and any remaining deficiency is calculated and funded in accordance with subsections 31(3) and (4) as if a default had occurred, except that the actuarial report shall value the plan as at the first day of the plan year in which funding ceases. Paragraphs (1)(b) and (c) do not apply if the face amount of the letters of credit obtained to fund the plan under this Part is included as a solvency asset as defined in subsection 2(1) of the Pension Benefit Standards Regulations, 1985. These Regulations cease to be in force on November 1, 2019. These Regulations come into force on the day on which they are registered. A reference to an “unfunded liability” in these Regulations includes a reference to an “initial unfunded liability” as defined in subsection 9(1) of the Pension Benefits Standards Regulations, 1985, as it read immediately before this section comes into force. These Regulations do not apply to a plan to which the Canadian Press Pension Plan Solvency Deficiency Funding Regulations apply.