Pension Benefits Standards Regulations, 1985 — 9
9 (1) In this section unfunded liability means (a) the going concern deficit of a plan as determined on the date that the plan was established; (b) 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 (c) the amount by which the going concern deficit of a plan determined at the valuation date exceeds the present value of going concern special payments of the plan established in respect of periods after the valuation date. (2) For the purposes of this section (a) the date of emergence of an unfunded liability in respect of an occurrence described in (i) paragraph (1)(a) is the effective date of the plan, (ii) paragraph (1)(b) is the effective date of the amendment, and (iii) paragraph (1)(c) is the valuation date; (b) the date of emergence of a solvency deficiency is the date of the valuation that identified the deficiency; and (c) the interest rate used to determine the present value of going concern special payments referred to in paragraph (1)(c) is the same as the interest rate used to determine the going concern liabilities of the plan at the valuation date. (3) An unfunded liability of a plan shall be funded by going concern special payments sufficient to liquidate the unfunded liability by equal annual payments over a period of 15 years from the date on which the unfunded liability emerged. (4) A plan shall be funded in each plan year as follows: (a) by a contribution equal to the normal cost of the plan, (b) by going concern special payments; (c) if the plan is not a negotiated contribution plan and there is a solvency deficiency, 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 that are payable during the plan year; (d) if the plan is not a negotiated contribution plan and there is an additional solvency deficiency referred to in subsection (12), by additional annual solvency special payments payable from the effective date of the amendment and equal to the amount by which the additional solvency deficiency divided by 5 exceeds the going concern special payment in respect of the unfunded liability emerging from the amendment to the plan; and (e) by an amount required to be paid by an employer under a defined contribution provision. (5) The amount required under paragraph (4)(a) or (e) may be reduced by all or a portion of the lesser of (a) the going concern excess, and (b) the amount by which the solvency assets exceed the solvency liabilities multiplied by 1.05. (6) If an unfunded liability or solvency deficiency is liquidated at a rate greater than the sum of the special payments required under paragraph (4)(b),(c) or (d) by the making of an additional payment, the amount of a special payment for a subsequent plan year may be reduced if the outstanding balance of an unfunded liability will at no time be greater than it would have been had the going concern special payments referred to in paragraph (4)(b) been made. (7) If the aggregate of the present value of going concern special payments referred to in paragraph (1)(c) exceeds the going concern deficit, this excess shall be applied to reduce the outstanding balance of any unfunded liability and the going concern special payments remaining to be made in respect of the unfunded liability shall be reduced pro rata . (8) The average solvency ratio for a valuation date is the arithmetic average of the solvency ratios at the valuation date, the prior valuation date and the prior second valuation date adjusted as follows: (a) the solvency ratio at the valuation date shall be adjusted to remove the effect of any amendment made after the prior second valuation date that retroactively increases or decreases the plan benefits; (b) the solvency ratio at the prior valuation date shall be adjusted t