Staff
The Quebec government’s new regulation regarding temporary solvency relief measures for DB pension plans comes into effect today.
Under the regulation, which was released on May 30, 2012, sponsors of private sector DB pension plans can choose one or more of three potential relief options for the funding of solvency deficiencies: consolidating deficits, smoothing assets and extending the amortization period.
Eckler has issued a special notice on the regulation, which outlines the relief options:
- Consolidating deficits — Unfunded liabilities relating to an amendment made before Dec. 31, 2008, and technical deficiencies determined at the date of a previous valuation can be consolidated in the first actuarial valuation after Dec. 30, 2011.
- Smoothing assets — A plan’s assets can be smoothed for up to five years, using a smoothing method that must be (a) provided to the pension committee and (b) reported in the plan’s actuarial valuation reports.
- Extending the amortization period — The maximum amortization period for a deficiency determined while temporary relief measures are in effect is 10 years after the date of the valuation that determined the deficiency.
The regulation comes into force today, June 14, 2012, but has retroactive effect from Dec. 31, 2011.