CANADA - The Canadian Minister of Finance has unveiled regulations to provide temporary solvency funding relief to federally regulated defined benefit pension plans.
The large solvency deficits for many sponsors of private DB schemes have been largely caused by the recent falls in global equity markets.
Canadian minister of finance Jim Flaherty said: "The measures will offer temporary relief to sponsors, while also protecting pension benefits."
The proposed regulations will be published on April 4 and outline a series of optional measures - including the extension of the solvency funding period by one year for deficiencies reported from the year-end between 1 November 2008 and 31 October 2009.
The measures also include the extension of the solvency funding payment to 10 years, increasing from five, with the agreement of members and retirees, when the difference is secured with a letter of credit, or for agent crown corporations.
The measures enable asset smoothing above 110% with the difference in payments subject to a trust.
Flaherty said it was hoped the new regulations would be introduced in the autumn.
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