On December 14, 2010, the federal Minister of Finance announced proposed changes to the Pension Benefits Standards Regulations, 1985 intended to "help pension plan sponsors to better manage their funding obligations while providing additional protection to plan members and retirees." The proposed amendments:
- permit the use of letters of credit in lieu of making solvency payments to a limit of 15% of plan assets;
- require plan sponsors to fully fund pension benefits on plan termination;
- void any plan amendments that would reduce the solvency ratio of the pension plan to below 0.85; and
- permit sponsors, plan members and retirees of a distressed pension plan to negotiate their own funding arrangements to facilitate a plan restructuring.
The proposed amendments are being released for a 30 day public comment period that starts with official pre-publication in the Canada Gazette on December 18, 2010.