PART I INTERPRETATION
 11.2 (1) In this section,  “closed plan” means a pension plan, (a)  that has no members who are entitled to defined benefits, or (b)  in which at least 25 per cent of the members of the plan who are entitled to defined benefits are in a class or classes of employees from which new members are not permitted, according to the terms of the plan, to join the plan and accrue defined benefits; (“régime fermé”) “non-fixed income assets” means assets other than fixed income assets. (“actif à revenu non fixe”) O. Reg. 250/18, s. 25; O. Reg. 105/19, s. 17 (1). (2) The provision for adverse deviations for a pension plan on a particular valuation date is the percentage calculated using the formula, A + B + C in which, “A”  is 0.05 for a pension plan that is a closed plan on the valuation date and 0.04 for a pension plan that is not a closed plan on that date, “B”  is the value determined under subsection (3), and “C”  is the greater of, (a)  zero, and (b)  the value equal to the plan’s duration of going concern liabilities calculated under subsection (5) multiplied by the amount by which “D” exceeds “E” where, “D”  is the plan’s going concern valuation interest rate which shall be gross of any provision for expenses paid or expected to be paid from the fund and may be net of any provision for expenses paid or expected to be paid from the fund for active management of investments, and “E”  is the plan’s benchmark discount rate calculated under subsections (7) to (12). O. Reg. 250/18, s. 25; O. Reg. 105/19, s. 17 (2). (3) The value of “B” for the purposes of subsection (2) is the value determined under Table 1 to this section based on the plan’s combined target asset allocation for non-fixed income assets, as determined under subsection (4), in accordance with the following rules: 1.  The value of “B” is the value in Column 3 or Column 4 of Table 1, whichever applies, opposite the combined target asset allocation for the non-fixed income assets of the plan under Column 2 of Table 1. 2.  If the combined target asset allocation for non-fixed income assets falls between two values in Column 2 of Table 1, the value of “B” shall be interpolated linearly from the values in Column 3 or 4 of Table 1, whichever applies. O. Reg. 250/18, s. 25. (4) The plan’s combined target asset allocation for non-fixed income assets shall be determined in accordance with the formula, 100% − J in which, “J”  is the combined target asset allocation for fixed income assets, determined under subsection (8). O. Reg. 250/18, s. 25. (5) For the purposes of determining the value of “C” under subsection (2), the value equal to the plan’s duration of going concern liabilities shall be calculated using the formula, (F − G) / (G × 0.01) in which, “F”  is the value of the plan’s going concern liabilities as of the valuation date, determined using a discount rate that is 1 per cent less than the discount rate used in the report, and “G”  is the value of the plan’s going concern liabilities as of the valuation date. O. Reg. 250/18, s. 25. (6) For the purposes of determining the values of “F” and “G” in subsection (5), the going concern liabilities of the plan may exclude estimated future costs for escalated adjustments and liabilities in respect of benefits for which an annuity contract has been purchased from an insurance company. O. Reg. 250/18, s. 25. (7) For the purposes of determining the value of “E” under subsection (2), the plan’s benchmark discount rate is the amount calculated using the formula, 0.005 + H + (0.015 × J) + (0.05 × K) in which, “H”  is the benchmark yield on long-term bonds issued by the Government of Canada for the valuation date, as determined from the Canadian Socio-Economic Information Management System (CANSIM) series V39056 compiled by Statistics Canada and available on the website of the Bank of Canada, “J”  is the combined target asset allocation for fixed income assets, determined under subsection (8), and “K”  is the combined target asset allocation for non-fixed income assets, determined under subsection (4). O. Reg. 250/18, s. 25. (8) Subject to subsections (9) to (11), for the purposes of the value of “J” in subsections (4) and (7), the plan’s combined target asset allocation for fixed income assets shall be determined in accordance with the formula, [L + (0.5 × M) + (N × P) + (0.5 × N × Q)] / (100% − R) in which, “L”  is the sum of the plan’s target asset allocations for each of the investment categories listed in paragraphs 1, 3, 4, 5, 15 and 16 of subsection 76 (12), excluding any portions of the target asset allocations that are allocated to the assets described in “R”, expressed as a percentage, “M”  is the sum of the plan’s target asset allocations for each of the investment categories listed in paragraphs 6 to 11 and 17 of subsection 76 (12), excluding any portions of the target asset allocations that are allocated to the assets described in “R”, expressed as a percentage, “N”  is the plan’s target asset allocation for the investment category listed in paragraph 2 of subsection 76 (12), expressed as a percentage, “P”  is the proportion of “N” that is allocated to the investment categories listed in paragraphs 1, 3, 4, 5, 15 and 16 of subsection 76 (12), expressed as a percentage, “Q”  is the proportion of “N” that is allocated to the investment categories listed in paragraphs 6 to 11 and 17 of subsection 76 (12), expressed as a percentage, and “R”  is the portion of the plan’s target asset allocation for each investment category listed in paragraphs 1, 3 to 11 and 15 to 17 of subsection 76 (12), expressed as a percentage, that is allocated to annuity contracts that have been purchased from an insurance company in respect of benefits. O. Reg. 250/18, s. 25. (9) In determining the values of “L” and “P” in subsection (8), any portion of a target asset allocation for an investment category listed in paragraph 4, 15 or 16 of subsection 76 (12) shall not be included unless the following criteria are met: 1.  The plan’s statement of investment policies and procedures must set out a minimum rating for target asset allocations of fixed income assets in the investment category, or the portion thereof, that is given by a credit rating agency recognized by a competent authority. 2.  As of the valuation date referred to in subsection (2), the minimum rating described in paragraph 1 must be at or above one of the following ratings: i.  The rating set out in Column 3 or 4 of Table 2 to this section, as applicable, opposite a credit rating agency in Column 2 of that Table. ii.  A rating that is equivalent to the rating described in subparagraph i and that is given by another credit rating agency recognized by a competent authority. O. Reg. 250/18, s. 25; O. Reg. 105/19, s. 17 (3-5). (9.1) Any portion of a target asset allocation excluded from the value of “L” in subsection (8) in accordance with subsection (9) shall be included in the value of “M” in subsection (8). O. Reg. 105/19, s. 17 (6). (9.2) Any portion of a target asset allocation excluded from the value of “P” in subsection (8) in accordance with subsection (9) shall be included in the value of “Q” in subsection (8). O. Reg. 105/19, s. 17 (6). (10) The target asset allocation to be used in determining the values of “L”, “M”, “N”, “P”, “Q” and “R” in subsection (8) is the target asset allocation in the plan’s statement of investment policies and procedures that is in effect as of the valuation date referred to in subsection (2). O. Reg. 250/18, s. 25; O. Reg. 105/19, s. 17 (7). (11) Subject to subsection (12), for a report with a valuation date before December 31, 2019, a plan’s actual asset allocations to the applicable investment categories on the valuation date of the report, as set out in the plan’s financial statements, may be used instead of the plan’s target asset allocations in determining the values of “L”, “M”, “N”, “P”, “Q” and “R” in subsection (8). O. Reg. 250/18, s. 25. (12) If a plan’s actual asset allocations are used under subsection (11), any asset in an investment category listed in paragraph 4, 15 or 16 of subsection 76 (12) shall not be included unless, as of the valuation date referred to in subsection (2), the minimum rating of the asset is at or above one of the following ratings: 1.  The rating set out in Column 3 or 4 of Table 2 to this section, as applicable, opposite a credit rating agency in Column 2 of that Table. 2.  A rating that is equivalent to the rating described in paragraph 1 and that is given by another credit rating agency recognized by a competent authority. O. Reg. 250/18, s. 25; O. Reg. 105/19, s. 17 (8). (12.1) Any asset in the actual asset allocation excluded from the value of “L” in subsection (8) in accordance with subsection (12) shall be included in the value of “M” in subsection (8). O. Reg. 105/19, s. 17 (9). (12.2) Any asset in the actual asset allocation excluded from the value of “P” in subsection (8) in accordance with subsection (12) shall be included in the value of “Q” in subsection (8). O. Reg. 105/19, s. 17 (9). (13) Despite anything else in this section, the provision for adverse deviations is deemed to be zero for, (a)  a jointly sponsored pension plan listed in subsection 1.3.1 (3); and (b)  a pension plan’s liabilities in respect of defined contribution benefits. O. Reg. 250/18, s. 25. TABLE 1   Value of “B” for the purposes of subsection (2) Column 1   Item    Column 2   Combined target asset allocation for non-fixed income assets   Column 3   Value of “B” for closed plan   Column 4   Value of “B” for plan other than closed plan 

  1.   0%   0   0 

  2.   20%   0.02   0.01 

  3.   40%   0.04   0.02 

  4.   50%   0.05   0.03 

  5.   60%   0.07   0.04 

  6.   70%   0.11   0.06 

  7.   80%   0.15   0.08 

  8.   100%   0.23   0.12 O. Reg. 250/18, s. 25. TABLE 2   minimum fixed income asset ratings for the purposes of SUBSECTIONs (9) and (12) Column 1   Item    Column 2   Credit rating agency   Column 3   Rating - bond market securities   Column 4   Rating - money market securities 

  1.   DBRS   BBB   R-2 (middle) 

  2.   Fitch Ratings   BBB-   F-3 

  3.   Moody’s Investors Service   Baa3   P-3 

  4.   Standard & Poor’s   BBB-   A-3 O. Reg. 250/18, s. 25. Contribution Requirements in Year of Report