1. CIA Annual Meeting Assemblée annuelle de l’ICA
June 29 & 30, 2006 Ÿ Les 29 et 30 juin 2006
Ottawa, Ontario

2. Monsanto Status Report - The Regulator’s Views
David Gordon
Deputy Superintendent, Pensions
Financial Services Commission of Ontario

3. Pension Benefits Act Section 70(6)
“On the partial wind up of a pension plan, members, former members and other persons entitled to benefits under the pension plan shall have rights and benefits that are not less than the rights and benefits they would have on a full wind up of the pension plan on the effective date of the partial wind up.”

4. What did the SCC say?
“A partial wind up requires a full wind up to notionally occur for the purposes of evaluating the pro rata share of the assets and liabilities related to the partial wind up, followed by the continuation of the remainder of the Plan.”
“For wind ups in whole or in part, the main concern is severing the terminated part of the Plan and ensuring Affected Members receive their legal entitlements, if any, as beneficiaries through the distribution of assets related to the part of the Plan being wound up.”

5. Surplus Distribution Requirements
Pension Benefits Act, Section 79(3)
“the pension plan provides for the payment of surplus to the employer on the wind up of the pension plan”
Regulation 909, Section 8
2/3 consent

6. What is FSCO asking for?
Allocation of assets as of the partial wind up date pro rata to wind up liabilities
Roll forward of the partial wind up assets to current date
Reconciliation of partial wind up members
Updated balance sheet for the partial wind up portion
Timetable to address partial wind up surplus
Surplus application that meets the requirements

7. Issues Use of surplus to pay expenses (Kerry decision impact?)
Use of surplus for contribution holidays in continuing portion of plan
Purchase of annuities
Multiple events considered in sequence

8. Plans Impacted Plans affected: 215 Partial wind ups: 309 Closed 92
Outstanding (185 plans)

9. Outstanding Challenges
Asset allocations for multi-jurisdictional plans
Retaining “employer” surplus in ongoing portion of plan
Annuity purchases
Small indexed pensions
Deferred members
Prior year credit balances

10. “Creative Solutions” ?
Talk to us

11. Thank you