C-22814470Elizabeth II2021-2022An Act to amend the Bankruptcy and Insolvency Act, the Companies' Creditors Arrangement Act and the Pension Benefits Standards Act, 1985An Act to amend the Bankruptcy and Insolvency Act, the Companies' Creditors Arrangement Act and the Pension Benefits Standards Act, 198520222
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Ms. Gladu441077SUMMARYThis enactment amends the Bankruptcy and Insolvency Act and the Companies’ Creditors Arrangement Act to ensure that claims in respect of unfunded liabilities or solvency deficiencies of pension plans and claims relating to the cessation of an employer’s participation in group insurance plans are paid in priority in the event of bankruptcy proceedings.It also amends the Pension Benefits Standards Act, 1985 to provide that an employer may provide financial security in the form of insurance for any portion of the contributions that they are required to pay under subsections 9(1.1) and (1.2) of the Act, and to authorize the administrator of an underfunded pension plan, in certain situations, to transfer or permit the transfer of any part of the assets or liabilities of the pension plan to another pension plan. The amendments also provide for the tabling of an annual report respecting the solvency of pension plans.Her Majesty, by and with the advice and consent of the Senate and House of Commons of Canada, enacts as follows:Short Title
Short titleThis Act may be cited as the Pension Protection Act.
R.S., c. B-3; 1992, c. 27, s. 2Bankruptcy and Insolvency Act
Subparagraph 60(1.5)(a)(ii) of the Bank­ruptcy and Insolvency Act is amended by adding the following after clause (A):an amount equal to the sum of all special payments, determined in accordance with section 9 of the Pension Benefits Standards Regulations, 1985, that were required to be paid by the employer to the fund referred to in sections 81.5 and 81.6 to liquidate an unfunded liability or a solvency deficiency,any amount required to liquidate any other unfunded liability or solvency deficiency of the fund as determined at the time of the filing of the notice of intention or of the proposal, if no notice of intention was filed,Subparagraph 60(1.5)(a)(iii) of the Act is amended by adding the following after clause (A):an amount equal to the sum of all special payments, determined in accordance with section 9 of the Pension Benefits Standards Regulations, 1985, that would have been required to be paid by the employer to the fund referred to in sections 81.5 and 81.6 to liquidate an unfunded liability or a solvency deficiency if the prescribed plan were regulated by an Act of Parliament,any amount required to liquidate any other unfunded liability or solvency deficiency of the fund as determined at the time of the filing of the notice of intention or of the proposal, if no notice of intention was filed,
Paragraph 81.5(1)(b) of the Act is amended by adding the following after subparagraph (i):an amount equal to the sum of all special payments, determined in accordance with section 9 of the Pension Benefits Standards Regulations, 1985, that were required to be paid by the employer to the fund referred to in this section and section 81.6 to liquidate an unfunded liability or a solvency deficiency,any amount required to liquidate any other unfunded liability or solvency deficiency of the fund,Paragraph 81.5(1)(c) of the Act is amended by adding the following after subparagraph (i):an amount equal to the sum of all special payments, determined in accordance with section 9 of the Pension Benefits Standards Regulations, 1985, that would have been required to be paid by the employer to the fund referred to in this section and section 81.6 to liquidate an unfunded liability or a solvency deficiency if the prescribed plan were regulated by an Act of Parliament,any amount required to liquidate any other unfunded liability or solvency deficiency of the fund,
Paragraph 81.6(1)(b) of the Act is amended by adding the following after subparagraph (i):an amount equal to the sum of all special payments, determined in accordance with section 9 of the Pension Benefits Standards Regulations, 1985, that would be required to be paid by the employer to the fund referred to in section 81.5 and this section to liquidate an unfunded liability or a solvency deficiency,any amount required to liquidate any other unfunded liability or solvency deficiency of the fund,Paragraph 81.6(1)(c) of the Act is amended by adding the following after subparagraph (i):an amount equal to the sum of all special payments, determined in accordance with section 9 of the Pension Benefits Standards Regulations, 1985, that would have been required to be paid by the employer to the fund referred to in section 81.5 and this section to liquidate an unfunded liability or a solvency deficiency if the prescribed plan were regulated by an Act of Parliament,any amount required to liquidate any other unfunded liability or solvency deficiency of the fund,
R.S., c. C-36Companies’ Creditors Arrangement Act
Subparagraph 6(6)(a)(ii) of the Companies’ Creditors Arrangement Act is amended by adding the following after clause (A):an amount equal to the sum of all special payments, determined in accordance with section 9 of the Pension Benefits Standards Regulations, 1985, that were required to be paid by the employer to the fund referred to in sections 81.5 and 81.6 of the Bankruptcy and Insolvency Act to liquidate an unfunded liability or a solvency deficiency,any amount required to liquidate any other unfunded liability or solvency deficiency of the fund as determined on the day on which proceedings commence under this Act,Subparagraph 6(6)(a)(iii) of the Act is amended by adding the following after clause (A):an amount equal to the sum of all special payments, determined in accordance with section 9 of the Pension Benefits Standards Regulations, 1985, that would have been required to be paid by the employer to the fund referred to in sections 81.5 and 81.6 of the Bankruptcy and Insolvency Act to liquidate an unfunded liability or a solvency deficiency if the prescribed plan were regulated by an Act of Parliament,any amount required to liquidate any other unfunded liability or solvency deficiency of the fund as determined on the day on which proceedings commence under this Act,
R.S., c. 32 (2nd Supp.)Pension Benefits Standards Act, 1985
Section 9 of the Pension Benefits Standards Act, 1985 is amended by adding the following after subsection (1.2):InsuranceAn non-countable employer may provide financial security in the form of insurance for any portion of the contributions that they are required to pay under subsection (1.1) or (1.2).
Section 29 of the Act is amended by adding the following after subsection (8):Amendment — liquidation, assignment or bankruptcy of the employerIf an employer is the subject of proceedings under the Companies’ Creditors Arrangement Act or Part III of the Bankruptcy and Insolvency Act and the amount required to permit a pension plan to satisfy all obligations with respect to pension benefits and other benefits to be provided under the plan is greater than the assets of the plan, the administrator may apply to the Superintendent for permission to transfer or permit the transfer of any part of the assets or liabilities of the pension plan to another pension plan.No action against administratorNo action lies against any administrator for transferring or permitting the transfer of any part of the assets or liabilities of a pension plan to another pension plan in compliance with subsection (8.1).
Section 40 of the Act is replaced by the following:
Annual reportThe Superintendent shall, after consultation with the Chief Actuary of the Office of the Superintendent of Financial Institutions and as soon as possible after the end of each fiscal year, submit to the Minister a report onthe operation of this Act during that year; andthe success of pension plans in meeting the funding requirements, determined in accordance with section 9, and the corrective measures taken or directed to be taken to deal with any pension plans that are not meeting the funding requirements.Tabling in ParliamentThe Minister shall cause the report to be tabled in each House of Parliament on any of the first 15 days on which that House is sitting after the day the Minister receives it.Transmission to provincesAs soon as possible after the tabling of the report in Parliament, the Superintendent shall transmit the report to the relevant provincial ministers responsible for finance and provincial securities commissions.
Transitional Provisions
Exception — employersSections 2 to 4 do not apply in respect of a person who is an employer and who, on the day before the day on which those sections come into force, participated in a prescribed pension plan for the benefit of the person’s employees until the fifth anniversary of the day on which this Act comes into force. Exception — companiesSubsections 5(1) and (2) do not apply in respect of a company that, on the day before the day on which those subsections come into force, participated in a prescribed pension plan for the benefit of its employees until the fifth anniversary of the day on which this Act comes into force.