Bill C-331
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C-331
First Session, Forty-first Parliament,
60 Elizabeth II, 2011
HOUSE OF COMMONS OF CANADA
BILL C-331
An Act to amend the Bankruptcy and Insolvency Act and the Companies' Creditors Arrangement Act (pension plans)
first reading, October 18, 2011
Mr. Marston
411292
SUMMARY
This enactment amends the Bankruptcy and Insolvency Act and the Companies’ Creditors Arrangement Act to ensure that unfunded pension plan liabilities are accorded priority of claims in the event of bankruptcy proceedings.
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1st Session, 41st Parliament,
60 Elizabeth II, 2011
house of commons of canada
BILL C-331
An Act to amend the Bankruptcy and Insolvency Act and the Companies' Creditors Arrangement Act (pension plans)
Her Majesty, by and with the advice and consent of the Senate and House of Commons of Canada, enacts as follows:
R.S., c. B-3; 1992, c. 27, s. 2
BANKRUPTCY AND INSOLVENCY ACT
1. (1) Clause 60(1.5)(a)(ii)(A) of the Bankruptcy and Insolvency Act is replaced by the following:
(A) an amount equal to the normal cost, within the meaning of subsection 2(1) of the Pension Benefits Standards Regulations, 1985, that the employer would be required to pay to the fund and an amount equal to the total of
(I) the sum of all special payments — determined in accordance with section 9 of the Pension Benefits Standards Regulations, 1985 — required to be paid by the bankrupt to the fund referred to in sections 81.5 and 81.6, for the purpose of liquidating an unfunded liability or a solvency deficiency, and
(II) any amount required to liquidate any additional unfunded liability or solvency deficiency as determined at the time of bankruptcy, and
(2) Clause 60(1.5)(a)(iii)(A) of the Act is replaced by the following:
(A) an amount equal to the amount that would be the normal cost, within the meaning of subsection 2(1) of the Pension Benefits Standards Regulations, 1985, that the employer would be required to pay to the fund if the prescribed plan were regulated by an Act of Parliament and an amount equal to the total of
(I) the sum of all special payments — determined in accordance with section 9 of the Pension Benefits Standards Regulations, 1985 — required to be paid by the bankrupt to the fund referred to in sections 81.5 and 81.6, for the purpose of liquidating an unfunded liability or a solvency deficiency, and
(II) any amount required to liquidate any additional unfunded liability or solvency deficiency as determined at the time of bankruptcy, and
2. (1) Subparagraph 81.5(1)(b)(i) of the Act is replaced by the following:
(i) an amount equal to the normal cost, within the meaning of subsection 2(1) of the Pension Benefits Standards Regulations, 1985, that is required to be paid by the employer to the fund and an amount equal to the total of
(A) the sum of all special payments — determined in accordance with section 9 of the Pension Benefits Standards Regulations, 1985 — required to be paid by the bankrupt to the fund referred to in this section and section 81.6, for the purpose of liquidating an unfunded liability or a solvency deficiency, and
(B) any amount required to liquidate any additional unfunded liability or solvency deficiency as determined at the time of bankruptcy, and
(2) Subparagraph 81.5(1)(c)(i) of the Act is replaced by the following:
(i) an amount equal to the amount that would be the normal cost, within the meaning of subsection 2(1) of the Pension Benefits Standards Regulations, 1985, that the employer would be required to pay to the fund if the prescribed plan were regulated by an Act of Parliament and an amount equal to the total of
(A) the sum of all special payments — determined in accordance with section 9 of the Pension Benefits Standards Regulations, 1985 — required to be paid by the bankrupt to the fund referred to in this section and in section 81.6, for the purpose of liquidating an unfunded liability or a solvency deficiency, and
(B) any amount required to liquidate any additional unfunded liability or solvency deficiency as determined at the time of bankruptcy, and
3. (1) Subparagraph 81.6(1)(b)(i) of the Act is replaced by the following:
(i) an amount equal to the normal cost, within the meaning of subsection 2(1) of the Pension Benefits Standards Regulations, 1985, that is required to be paid by the employer to the fund and an amount equal to the total of
(A) the sum of all special payments — determined in accordance with section 9 of the Pension Benefits Standards Regulations, 1985 — required to be paid by the bankrupt to the fund referred to in section 81.5 and in this section, for the purpose of liquidating an unfunded liability or a solvency deficiency, and
(B) any amount required to liquidate any additional unfunded liability or solvency deficiency as determined at the time of bankruptcy, and
(2) Subparagraph 81.6(1)(c)(i) of the Act is replaced by the following:
(i) an amount equal to the amount that would be the normal cost, within the meaning of subsection 2(1) of the Pension Benefits Standards Regulations, 1985, that the employer would be required to pay to the fund if the prescribed plan were regulated by an Act of Parliament and an amount equal to the total of
(A) the sum of all special payments — determined in accordance with section 9 of the Pension Benefits Standards Regulations, 1985 — required to be paid by the bankrupt to the fund referred to in section 81.5 and in this section, for the purpose of liquidating an unfunded liability or a solvency deficiency, and
(B) any amount required to liquidate any additional unfunded liability or solvency deficiency as determined at the time of bankruptcy, and
4. The Act is amended by adding the following after section 136:
Priority — additional claim
136.1 Despite subsection 136(1), there shall be deemed to be included after the wages, salaries, commissions, compensation or dis- bursements referred to in paragraph 136(1)(d) an amount equal to the total of
(a) the sum of all special payments — determined in accordance with section 9 of the Pension Benefits Standards Regulations, 1985 — required to be paid by the bankrupt to the fund referred to in sections 81.5 and 81.6, for the purpose of liquidating an unfunded liability or a solvency deficiency,
(b) any amount required to liquidate any additional unfunded liability or solvency deficiency as determined at the time of bankruptcy, and
(c) any termination or severance pay owed to a clerk, servant, travelling salesperson, labourer or worker by a bankrupt, less any amount previously paid by the trustee for that termination or severance pay.
R.S., c. C-36
COMPANIES’ CREDITORS ARRANGEMENT ACT
5. (1) Clause 6(6)(a)(ii)(A) of the Companies’ Creditors Arrangement Act is replaced by the following:
(A) an amount equal to the normal cost, within the meaning of subsection 2(1) of the Pension Benefits Standards Regulations, 1985, that is required to be paid by the employer to the fund and an amount equal to the total of
(I) the sum of all special payments — determined in accordance with section 9 of the Pension Benefits Standards Regulations, 1985 — required to be paid by the bankrupt to the fund referred to in sections 81.5 and 81.6 of the Bankruptcy and Insolvency Act, for the purpose of liquidating an unfunded liability or a solvency deficiency, and
(II) any amount required to liquidate any additional unfunded liability or solvency deficiency as determined at the time of bankruptcy, and
(2) Clause 6(6)(a)(iii)(A) of the Act is replaced by the following:
(A) an amount equal to the amount that would be the normal cost, within the meaning of subsection 2(1) of the Pension Benefits Standards Regulations, 1985, that the employer would be required to pay to the fund if the prescribed plan were regulated by an Act of Parliament and an amount equal to the total of
(I) the sum of all special payments — determined in accordance with section 9 of the Pension Benefits Standards Regulations, 1985 — required to be paid by the bankrupt to the fund referred to in sections 81.5 and 81.6 of the Bankruptcy and Insolvency Act, for the purpose of liquidating an unfunded liability or a solvency deficiency, and
(II) any amount required to liquidate any additional unfunded liability or solvency deficiency as determined at the time of bankruptcy, and
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