Subsequent solvency funding relief re stage two
 12. (1) In this section, “first subsequent report” means the first report filed under this Regulation after the stage two valuation report. O. Reg. 350/16, s. 4. (2) This section applies with respect to a public sector pension plan listed in Schedule 2 during the period that begins no more than three years after its stage two valuation date and ends on the day the 10-year period described in paragraph 2 of subsection 9 (2) or paragraph 2 of subsection 9 (4), as applicable, ends. O. Reg. 350/16, s. 4. (3) The following rules apply with respect to the pension plan as of a particular valuation date during the period described in subsection (2) if the valuation date is before December 31, 2017: 1. Special payments to liquidate any solvency deficiency determined as of the particular valuation date must be made in equal monthly instalments beginning on a day that is not later than 12 months after that valuation date and ending on the later of the following dates: i. The day on which the 10-year period described in paragraph 2 of subsection 9 (2) or paragraph 2 of subsection 9 (4), as applicable, ends. ii. Five years after the day on which the equal monthly instalments begin. 2. Despite paragraph 1, if the valuation date of the first subsequent report is before December 31, 2017 and if the administrator of the pension plan makes an election to do so, the special payments to liquidate any solvency deficiency determined in the first subsequent report may be made in accordance with the rules set out in subsection (5). 3. The solvency asset adjustment for the pension plan is determined in accordance with section 1.2 of the General Regulation, with the following changes: i. If a benefit allocation method is used to set contribution rates, the reference to a five-year period in subclause 1.2 (1) (d) (ii) of the General Regulation is deemed to be a reference to a period that begins on the particular valuation date and ends on the last day of the period described in paragraph 1 of this subsection or subparagraph 3 vii of subsection (5), as applicable. ii. If a benefit allocation method is not used to set contribution rates, the reference to a five-year period in the definition of “C” in subsection 1.2 (2) of the General Regulation is deemed to be a reference to a period that begins on the particular valuation date and ends on the last day of the period described in paragraph 1 of this subsection or subparagraph 3 vii of subsection (5), as applicable. iii. For the purposes of subsection (5), the solvency asset adjustment must exclude the amount determined under clause 1.2 (1) (a) of the General Regulation. O. Reg. 350/16, s. 4; O. Reg. 257/18, s. 2 (1, 2). (4) The special payments required by paragraphs 1 and 2 of subsection (3) are deemed to be special payments required under clause 5 (1) (e) of the General Regulation. O. Reg. 350/16, s. 4. (5) If the valuation date of the first subsequent report is before December 31, 2017 and if the administrator of the pension plan makes an election to do so, the special payments to liquidate any solvency deficiency determined in the first subsequent report as of its valuation date may be made in accordance with the following rules: 1. Notice of the election must be filed with the Superintendent no later than the day on which the first subsequent report is filed. 2. Any special payments required under paragraph 2 of subsection 9 (2) or paragraph 4 of subsection 9 (4) to liquidate a solvency deficiency determined in the stage two valuation report are no longer required on and after the day that is 12 months after the valuation date of the first subsequent report. 3. The minimum monthly amount of the special payments required with respect to the solvency deficiency determined in the first subsequent report is determined in accordance with the following rules: i. Determine the ratio of solvency assets to solvency liabilities. ii. Subtract the ratio of solvency assets to solvency liabilities from 1. iii. Take the greater of zero and the amount calculated under subparagraph ii and multiply it by 0.25. iv. Add the amounts calculated under subparagraphs i and iii together. v. Determine the modified solvency liabilities of the pension plan as of the valuation date of the first subsequent report by multiplying the amount of the solvency liabilities by the amount calculated under subparagraph iv. vi. Determine the amount of the modified solvency deficiency of the pension plan which is the greater of zero and the amount by which the modified solvency liabilities exceeds the sum of the solvency assets and the solvency asset adjustment. vii. Determine the amount of the modified solvency special payments for the pension plan which is the amount of the special payments required to liquidate the modified solvency deficiency (together with interest at the same rates used in the first subsequent report to determine the solvency liabilities) by equal monthly instalments over a period of not more than seven years, beginning on a date no later than 12 months after the valuation date of the first subsequent report. viii. Subtract the modified solvency liabilities from the solvency liabilities. ix. Determine the amount of initial interest payable over the period of one month on the amount determined under subparagraph viii at the same rates used in the first subsequent report to determine the solvency liabilities. x. Determine the amount that is the greater of zero and the amount by which the sum of the solvency assets and the solvency asset adjustment exceeds the modified solvency liabilities. xi. Determine the monthly amount of interest offset for the period referred to in subparagraph vii, of which the present value, calculated using the interest rates used in the first subsequent report to determine the solvency liabilities, equals the amount calculated under subparagraph x. xii. Subtract the interest offset obtained under subparagraph xi from the initial interest obtained under subparagraph ix. xiii. Take the greater of zero and the amount determined under subparagraph xii. xiv. The minimum monthly amount of the special payments required in respect of the solvency deficiency is the sum of the amounts in subparagraphs vii and xiii. O. Reg. 350/16, s. 4; O. Reg. 257/18, s. 2 (3). (6) If the administrator of a public sector pension plan makes the election described in subsection (5), subsections 14 (2) and (3) of the General Regulation do not apply to the pension plan for three years after the valuation date of the first subsequent report if the valuation date is before December 31, 2017. O. Reg. 350/16, s. 4; O. Reg. 257/18, s. 2 (4). (7) The conditions and restrictions described in subsection 9 (3) continue to apply during the period that begins three years after the stage two valuation date and ends on the earlier of, (a) 19 years after the stage one valuation date; and (b) the date on which the second of two consecutive reports is filed under this Regulation or under section 3 or 14 of the General Regulation, indicating that the transfer ratio of the pension plan is at least 1.0. O. Reg. 350/16, s. 4. (8) In subsection (9), “previously-scheduled special payments” means, in relation to a particular valuation date, (a) the special payments required by paragraph 1 of subsection (3) and paragraph 3 of subsection (5) with respect to solvency deficiencies arising before the valuation date that are scheduled for payment after the valuation date, and (b) the special payments required by paragraph 2 of subsection 9 (2) or paragraphs 2 and 4 of subsection 9 (4), as applicable, with respect to solvency deficiencies arising before the valuation date that are scheduled for payment after the valuation date; “solvency excess” means, in relation to a particular valuation date, the amount, if any, by which the sum of the solvency assets and the solvency asset adjustment exceeds the sum of the solvency liabilities, the solvency liability adjustment and the prior year credit balance. O. Reg. 350/16, s. 4. (9) If there is a solvency excess on a particular valuation date that is before December 31, 2017, the previously-scheduled special payments must be adjusted in accordance with the following rules: 1. If the solvency excess is greater than or equal to the sum of the present value of the previously-scheduled special payments, those special payments must be reduced to zero. 2. If the solvency excess is less than the sum of the present value of the previously-scheduled special payments, the solvency excess may be applied to reduce any of the following in order to reduce the solvency excess to zero: i. The amount of the previously-scheduled special payments required by paragraph 2 of subsection 9 (2), paragraphs 2 and 4 of subsection 9 (4) or paragraph 3 of subsection (5), as applicable. ii. The amortization period of the previously-scheduled special payments referred to in subparagraph i. iii. The amortization period of the previously-scheduled special payments required by paragraph 1 of subsection (3). O. Reg. 350/16, s. 4; O. Reg. 257/18, s. 2 (5).