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CIA Annual Meeting Assembl

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Title: CIA Pension Seminar Last modified by: Sheila Richard Created Date: 2/6/2006 3:16:07 PM Document presentation format: On-screen Show Company – PowerPoint PPT presentation

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Title: CIA Annual Meeting Assembl


1
CIA Annual MeetingAssemblée annuelle de lICA
  • June 29 30, 2006 Ÿ Les 29 et 30 juin 2006
  • Ottawa, Ontario

2
Monsanto Status Report- The Regulators Views
  • David Gordon
  • Deputy Superintendent, Pensions
  • Financial Services Commission of Ontario

3
Pension Benefits Act
  • Section 70(6)
  • On the partial wind up of a pension plan,
    members, former members and other persons
    entitled to benefits under the pension plan shall
    have rights and benefits that are not less than
    the rights and benefits they would have on a full
    wind up of the pension plan on the effective date
    of the partial wind up.

4
What did the SCC say?
  • A partial wind up requires a full wind up to
    notionally occur for the purposes of evaluating
    the pro rata share of the assets and liabilities
    related to the partial wind up, followed by the
    continuation of the remainder of the Plan.
  • For wind ups in whole or in part, the main
    concern is severing the terminated part of the
    Plan and ensuring Affected Members receive their
    legal entitlements, if any, as beneficiaries
    through the distribution of assets related to the
    part of the Plan being wound up.

5
Surplus Distribution Requirements
  • Pension Benefits Act, Section 79(3)
  • the pension plan provides for the payment of
    surplus to the employer on the wind up of the
    pension plan
  • Regulation 909, Section 8
  • 2/3 consent

6
What is FSCO asking for?
  • Allocation of assets as of the partial wind up
    date pro rata to wind up liabilities
  • Roll forward of the partial wind up assets to
    current date
  • Reconciliation of partial wind up members
  • Updated balance sheet for the partial wind up
    portion
  • Timetable to address partial wind up surplus
  • Surplus application that meets the requirements

7
Issues
  • Use of surplus to pay expenses (Kerry decision
    impact?)
  • Use of surplus for contribution holidays in
    continuing portion of plan
  • Purchase of annuities
  • Multiple events considered in sequence

8
Plans Impacted
  • Plans affected 215
  • Partial wind ups 309
  • Closed 92
  • Outstanding 217 (185 plans)

9
Outstanding Challenges
  • Asset allocations for multi-jurisdictional plans
  • Retaining employer surplus in ongoing portion
    of plan
  • Annuity purchases
  • Small indexed pensions
  • Deferred members
  • Prior year credit balances

10
Creative Solutions
  • ?
  • Talk to us

11
Thank you
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