Bill C-85

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First Reading

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	(a) members of the pension plan; and
	(b) former members of the plan and any other persons within a prescribed class.
Submission to arbitration	(3) If entitlement is not established under subsection (2) but more than one half of the persons in both of the categories consented to the proposal, the employer may submit the issue to arbitration unless the pension plan is terminated, in which case the employer shall submit the issue to arbitration. The employer shall notify the Superintendent and the persons in the categories set out in subsection (2) if the issue is to be submitted to arbitration.
Choice of arbitrator	(4) The arbitrator shall be chosen by the employer and the persons in the categories set out in subsection (2). If they cannot agree on an arbitrator within the prescribed period, the Superintendent shall choose the arbitrator.
Arbitration	(5) The arbitrator is not bound by any legal or technical rules of evidence in conducting any matter that comes before him or her, and shall deal with it as informally and expeditiously as the circumstances and considerations of fairness and natural justice permit.
Costs of arbitration	(6) Subject to the provisions of the pension plan, the parties to an arbitration shall pay the costs of it in the amount, subject to the approval of the Superintendent, and in the proportion that the arbitrator determines.
Issuance of decision	(7) The arbitrator shall issue a written decision and file the decision with the Superintendent within ten days after issuing it. The Superintendent shall make the decision available for inspection by any person.
Decision binding	(8) An arbitrator's decision is final and binding on the parties and on any other person affected by it.
Notification to unions	(9) All notifications to unionized members under this section shall also be made to the executive of their union.
Union represents members	(10) Unless otherwise provided by the relevant collective agreement, the executive of a union shall represent its members for the purposes of this section.
	10. Sections 10 and 11 of the Act are replaced by the following:
Duty of administrator to file documents	10. (1) The administrator of a pension plan shall file with the Superintendent, within sixty days after the plan is established,
	(a) a copy of the plan;
	(b) a copy of every document that creates or supports the plan or the pension fund; and
	(c) a declaration (in the form, if any, specified by the Superintendent) signed by the administrator that the plan complies with this Act and the regulations.
Registration of pension plan	(2) Subject to subsection (3), the Superintendent shall register a pension plan and issue a certificate of registration in respect of the plan if the administrator has filed the documents under subsection (1).
Refusal to register	(3) The Superintendent may refuse to register a pension plan if the plan does not comply with this Act or the regulations.
Notification	(4) If the Superintendent refuses to register a pension plan, the Superintendent shall notify the administrator of the particulars of the non-compliance.
Administra- tion of plan prohibited	(5) An administrator shall not administer a pension plan before complying with subsection (1) and shall, while the plan remains in force, ensure that it complies with this Act and the regulations.
Treatment of surplus	(6) Every pension plan that is filed for registration must provide for the use of surplus during the continuation of the plan and on its termination.
Filing of amendments	10.1 (1) The administrator of a pension plan shall file with the Superintendent, within sixty days after making an amendment to any document referred to in subsection 10(1), a copy of the amendment and a declaration (in the form, if any, specified by the Superintendent) signed by the administrator that the plan as amended complies with this Act and the regulations.
Void amendments	(2) Unless the Superintendent authorizes the amendment, an amendment is void if it
	(a) has the effect of reducing
	(i) pension benefits accrued before the date of the amendment or pension benefit credits relating to pension benefits accrued before the date of the amendment, or
	(ii) an immediate or deferred pension benefit to which a member, former member or any other person was entitled before the date of the amendment; or
	(b) would cause the pension plan to fail prescribed tests for solvency.
	Transfer of Funds
No transfer without permission	10.2 Subject to section 26, the administrator of a pension plan shall not transfer or permit the transfer of any part of the assets of the pension fund to another pension fund, including a pension fund to which this Act does not apply, without the Superintendent's permission.
	Directions of Compliance
Superinten- dent's directions to administra- tors	11. (1) If, in the opinion of the Superintendent, an administrator, an employer or any person is, in respect of a pension plan, committing or about to commit an act, or pursuing or about to pursue any course of conduct, that is contrary to safe and sound financial or business practices, the Superintendent may direct the administrator, employer or other person to
	(a) cease or refrain from committing the act or pursuing the course of conduct; and
	(b) perform such acts as in the opinion of the Superintendent are necessary to remedy the situation.
Directions in the case of non- compliance	(2) If, in the opinion of the Superintendent, a pension plan does not comply with this Act or the regulations or is not being administered in accordance with this Act, the regulations or the plan, the Superintendent may direct the administrator, the employer or any person to
	(a) cease or refrain from committing the act or pursuing the course of conduct that constitutes the non-compliance; and
	(b) perform such acts as in the opinion of the Superintendent are necessary to remedy the situation.
Opportunity for represen- tations	(3) Subject to subsection (4), no direction shall be issued under subsection (1) or (2) unless the Superintendent gives the administrator, employer or other person a reasonable opportunity to make written representations.
Temporary direction	(4) If, in the opinion of the Superintendent, the length of time required for representations to be made under subsection (3) might be prejudicial to the interests of the members, former members or any other persons entitled to pension benefits or refunds under the pension plan, the Superintendent may make a temporary direction with respect to the matters referred to in subsection (1) or (2) that has effect for a period of not more than fifteen days.
Continued effect	(5) A temporary direction under subsection (4) continues to have effect after the expiry of the fifteen day period referred to in that subsection if no representations are made to the Superintendent within that period or, if representations have been made, the Superintendent notifies the administrator, employer or other person that the Superintendent is not satisfied that there are sufficient grounds for revoking the direction.
Revocation of registration	11.1 The Superintendent may revoke the registration and cancel the certificate of registration in respect of a pension plan if the administrator of the plan does not comply with a direction under section 11 within sixty days, or such longer period as the Superintendent may determine, after being informed by the Superintendent of the failure to comply. The Superintendent shall notify the administrator of the measures taken, including the date of the revocation and cancellation.
	11. The heading before section 12 of the Act is replaced by the following:
	GENERAL REQUIREMENTS
	Duty to Provide Information
	12. (1) Section 12 of the Act is amended by adding the following after subsection (3):
Actuarial reports and financial statements	(3.1) Except as otherwise specified by the Superintendent,
	(a) the actuarial reports shall be prepared in accordance with the standards of practice adopted by the Canadian Institute of Actuaries; and
	(b) the financial statements shall be prepared in accordance with generally accepted accounting principles, the primary source of which is the Handbook of the Canadian Institute of Chartered Accountants.
	(2) Section 12 of the Act is amended by adding the following after subsection (4):
Penalty for default in filing	(5) Every administrator who fails to file an information return or other information at an interval or a time required under this section incurs a penalty of the prescribed amount for each day during which the failure continues.
Debt due to Her Majesty	(6) A penalty incurred under this section is a debt due to Her Majesty in right of Canada and is recoverable as such in the Federal Court or any other court of competent jurisdiction.
Remission of penalty	(7) The Superintendent may remit all or any part of a penalty incurred under this section.
	13. Section 13 of the Act and the heading before it are replaced by the following:
Information to members	13. The administrator of a pension plan shall provide to the plan members, former members and any other persons entitled to pension benefits or refunds under the plan, at the time and in the manner specified by the Superintendent, any information that the Superintendent specifies.
	14. (1) The portion of subsection 18(1) of the Act before paragraph (a) is replaced by the following:
Provisions respecting locking-in	18. (1) Subject to subsections 23(5) and 25(4), a pension plan shall provide
	(2) Paragraph 18(2)(c) of the Act is replaced by the following:
	(c) that, if the annual pension benefit payable is less than four per cent of the Year's Maximum Pensionable Earnings for the calendar year in which a member ceases to be a member of the plan or dies, or such other percentage as may be prescribed , the pension benefit credit may be paid to the member or surviving spouse, as the case may be.
	15. (1) Subsection 23(1) of the Act is replaced by the following:
If member dies before eligible for early retirement	23. (1) If a member or former member of a pension plan who is entitled to a deferred pension benefit pursuant to subsection 17(1) (or, in the case of a member, would be so entitled if the member ceased membership in the plan) dies before becoming eligible to receive an immediate pension benefit in accordance with subsection 16(2), the surviving spouse, if any, is entitled to that portion of the pension benefit credit, calculated in accordance with section 21, to which the member or former member would have been entitled on the day of death if the member or former member had terminated employment on that day and had not died, that is attributable to the member's or former member's membership in the plan after December 31, 1986.
	(2) The portion of subsection 23(3) of the Act before paragraph (a) is replaced by the following:
If member eligible for retirement dies	(3) A member or former member of a pension plan who is entitled to a deferred pension benefit pursuant to subsection 17(1) (or, in the case of a member, would be so entitled if the member ceased membership in the plan) and dies before commencement of payment of that pension benefit but after becoming eligible to receive an immediate pension benefit in accordance with subsection 16(2) is deemed
	(3) Subsection 23(4) of the Act is replaced by the following:
Eligibility of spouse	(4) The surviving spouse of the member or former member described in subsection (3) is entitled to the pension benefit credit to which the member or former member would have been entitled on the day of death if the member or former member had terminated employment on that day and had not died, if the credit in whole or in part results from a defined contribution plan and is attributable to the member's or former member's membership in the plan after December 31, 1986.
Surrender of pension benefit or pension benefit credit	(5) A pension plan may provide that a surviving spouse may, after the death of a member or former member, surrender, in writing, the pension benefit or pension benefit credit to which the spouse is entitled under this section and designate a beneficiary who is a dependant, within the meaning of subsection 8500(1) of the Income Tax Regulations, of the spouse, member or former member.
Effect of group life insurance plan	(6) Subject to subsection (7), a defined benefit plan may provide for the reduction of the benefit payable under any of subsections (1) to (3) by an amount equal to that part of the group life insurance payment that can be considered to have been paid by employer premiums, calculated in a manner satisfactory to the Superintendent, if
	(a) in the circumstances described in any of subsections (1) to (3), a surviving spouse is entitled to a payment under a group life insurance plan on the death of the member or former member of the pension plan;
	(b) the group life insurance plan is one that is approved by the Superintendent for the purposes of this subsection; and
	(c) the group life insurance premiums are paid in whole or in part by the employer.
Limitation	(7) In respect of a reduction referred to in subsection (6),
	(a) the actuarial present value of the reduction may not exceed the amount of the payment to which the surviving spouse is entitled under the group life insurance plan; and
	(b) in the case of a contributory pension plan, the reduction may not reduce the benefit payable to the surviving spouse to an amount less than the aggregate of the member's required contributions together with interest in accordance with section 19.
	16. (1) The portion of subsection 26(1) of the Act before paragraph (a) is replaced by the following:
If member not yet eligible to retire	26. (1) If a member, before becoming eligible to receive an immediate pension benefit pursuant to subsection 16(2), ceases to be a member of a pension plan or dies, the member or the surviving spouse, as the case may be, is entitled
	(2) Paragraph 26(2)(b) of the Act is replaced by the following:
	(b) to transfer the member's pension benefit credit or the surviving spouse's pension benefit credit, whichever is applicable, to a retirement savings plan of the prescribed kind for the member or surviving spouse, as the case may be; or
	(3) Subparagraph 26(3)(b)(ii) of the Act is replaced by the following:
	(ii) transfer it to a retirement savings plan of the prescribed kind for the member or surviving spouse, as the case may be, or
	(4) Section 26 of the Act is amended by adding the following after subsection (4):
Pension plans include	(5) For the purposes of this section, pension plans to which pension benefits may be transferred include
	(a) pension plans that are under provincial jurisdiction; and
	(b) pension plans that are organized and administered to provide pension benefits to employees employed in excepted employment.
	17. (1) Subparagraph 28(1)(b)(iii) of the Act is replaced by the following:
	(iii) the prescribed ratio of the plan or, if there is no prescribed ratio , the funded ratio, if applicable, and
	(2) The portion of paragraph 28(1)(c) of the Act before subparagraph (ii) is replaced by the following:
	(c) that each member and former member of the plan, every other person entitled to pension benefits or refunds under the plan and their spouses may, once in each year of operation of the plan, either personally or by an agent authorized in writing for that purpose,
	(i) examine the documents or information filed with the Superintendent under subsection 10(1) or 10.1(1) or section 12 or any regulations made under paragraph 39(i), and any other prescribed documents , at the Canadian head office of the administrator or at such other place as is agreed to by the administrator and the person requesting to examine the documents, and

Bill C-85

Transfer of Funds

Directions of Compliance

GENERAL REQUIREMENTS

Duty to Provide Information