BILL 51

An Act to Amend the Pension Benefits Act

Her Majesty, by and with the advice and consent of the Legislative Assembly of New Brunswick, enacts as follows:

1 The Pension Benefits Act, chapter P-5.1 of the Acts of New Brunswick, 1987, is amended by adding after section 99.4 the following:

WIND-UP OF FRASER PAPERS’ PENSION PLANS

Definition of “Regulation 91-195”

99.5 In sections 99.94 to 99.99, “Regulation 91-195” means New Brunswick Regulation 91-195 under this Act.

Application

99.6 Sections 99.7 to 99.992 apply to the following pension plans:

(a)  the Pension Plan for New Brunswick Hourly Paid Employees of Fraser Papers Inc., registration number 0251264, as amended; and

(b)  the Pension Plan for New Brunswick Salaried Employees of Fraser Papers Inc., registration number 0251256, as amended.

Wind-up in whole or in part

99.7 For greater certainty, reference to the wind-up of either pension plan includes the wind-up in whole or in part of the pension plan.

Amendments to the pension plans

99.8 Despite section 12, the following amendments are not void:

(a)  the amendment to the pension plan referred to in paragraph 99.6(a), received by the Superintendent on October 30, 2009, with an effective date of October 31, 2009; and

(b)  the amendment to the pension plan referred to in paragraph 99.6(b), received by the Superintendent on October 30, 2009, with an effective date of October 31, 2009.

Exemption from deemed trust

99.9 On and after the effective date of the wind-up of either pension plan, Fraser Papers Inc. is exempt from the application of subsection 51(4) with respect to the beneficiaries of the relevant pension plan.

Exemption from contribution requirements

99.91 On and after the effective date of the wind-up of either pension plan, Fraser Papers Inc. is exempt from the requirements of section 65 with respect to the relevant pension plan.

Exemption from successor employer and new plans provisions

99.92(1) On the sale of all or part of the business of or the assets of Fraser Papers Inc., FPS Canada Inc., Fraser Papers Holdings Inc., Fraser Timber Ltd., Fraser Papers Limited and Fraser N.H. LLC to Twin Rivers Paper Company Inc., Twin Rivers Paper Company Inc. shall be deemed not to be a successor employer under section 69.

99.92(2) On and after the effective date of the wind-up of either pension plan, sections 70 and 71 do not apply to the pension plan.

Interim wind-up reports

99.93(1) Within 6 months after the effective date of the wind-up of either pension plan, the administrator shall file with the Superintendent an interim wind-up report as at the effective date of the wind-up, prepared by an actuary and containing the information required by the Superintendent.

99.93(2) Beginning in the calendar year following the effective date of the wind-up and ending in the calendar year prior to the calendar year in which a wind-up report is filed, not later than October 1 each year, the administrator shall file an interim wind-up report as at April 1 of that year, prepared by an actuary and containing the information required by the Superintendent.

99.93(3) Beginning in the calendar year following the effective date of the wind-up and ending in the calendar year in which a wind-up report is filed, not later than October 1 each year, the administrator shall give to the persons listed in subsection 60(2) a notice containing the information required by the Superintendent as at April 1 of that year.

Wind-up report

99.94(1) Despite paragraph 49(2)(b) of Regulation 91-195, the administrator shall

(a)  prepare a wind-up report that includes the information listed in subsection 62(1) calculated as at April 1, 2018, unless otherwise ordered by the Superintendent, and

(b)  file the wind-up report no later than 6 months after the date for which the information in the wind-up report is calculated.

99.94(2) The administrator shall not give the statement required under subsection 64(1) to the persons listed in that subsection until the wind-up report has been approved by the Superintendent.

Administration of pension plans during wind-up

99.95(1) On and after the effective date of the wind-up of either pension plan, for the purpose of improving the plan’s funded ratio, the administrator may

(a)  receive money for the pension fund from any source, and

(b)  invest up to 40% of the pension fund in equity shares.

99.95(2) A source from which money is received under paragraph (1)(a) shall not be considered a pension fund.

Payments from fund during wind-up

99.96(1) On and after the effective date of the wind-up of either pension plan, subsections 62(2) and (3) of this Act and subsection 49(7) of Regulation 91-195 do not apply to the pension plan.

99.96(2) On and after the effective date of the wind-up of either pension plan until the date of the distribution of the assets of the pension fund, only the following payments may be made out of the fund:

(a)  pensions or other benefits for which payments had commenced before the effective date of the wind-up;

(b)  pensions or other benefits for which members become eligible after the effective date of the wind-up;

(c)  refunds of member contributions with interest to members who terminate employment before the effective date of the wind-up and who are not entitled to a pension or deferred pension;

(d)  payment of a pre-retirement death benefit;

(e)  on the approval of the Superintendent, payment of the defined contribution benefits of the plan;

(f)  on the approval of the Superintendent, the distribution of assets of the pension fund with respect to a member of former member or persons entitled to benefits or payments through a member or former member for whom the distribution has been requested by the pension regulator in a designated jurisdiction; and

(g)  any other payment approved by the Superintendent.

99.96(3) The value of any projected payments into a pension fund and the investment earnings included in an interim wind-up report filed by the administrator under section 99.93 shall be taken into account when making payments under paragraphs (2)(a), (b), (c), (d) or (g) or when ordering the reduction of any of those payments under subsection 66(2).

Distribution of assets - non-application of provisions

99.97 On and after the effective date of the wind-up of either pension plan, the following provisions do not apply to the plan:

(a)  subsection 66(1); and

(b)  paragraph 19(4)(c), subsection 49(6) and section 50 of Regulation 91-195.

Distribution of assets - rules

99.98(1) Subject to subsection 99.96(2), the assets in the fund of a pension plan shall not be distributed until the wind-up report is approved by the Superintendent.

99.98(2) On approval of the wind-up report, if insufficient funds are available to pay the pensions and benefits under a plan, the funds that are available shall be allocated in the following manner in order of priority:

(a)  to all members and former members or persons entitled to benefits or payments through members or former members, for transfer of or purchase with an amount equal to any additional voluntary contributions made by the member or former member with interest accrued as of the effective date of the wind-up, after deducting any transfer value for those additional voluntary contributions previously transferred in respect of the member or former member;

(b)  to all members and former members or persons entitled to benefits or payments through members or former members and who were not in receipt of a pension as of the effective date of the wind-up, for transfer of or purchase with an amount equal to the total of any contributions, other than contributions made under paragraph (a), made by the member or former member, with interest accrued as of the effective date of the wind-up, after deducting any transfer value for the contributions previously transferred in respect of the member or former member;

(c)  to all members and former members or persons entitled to benefits or payments through members or former members and who were in receipt of a pension as of the effective date of the wind-up, for transfer of or purchase with an amount equal to the total of the pension and bridging benefits payable in respect of the period commencing the effective date of the wind-up to April 30, 2010, inclusive, after deducting any transfer value for the benefits or payments previously transferred in respect of the member or former member, and

(d)  to all members and former members or persons entitled to benefits or payments through members or former members, for transfer of or purchase with an amount equal to the commuted value, determined in accordance with section 99.99, of the pension or deferred pension to which the person is entitled, multiplied by the allocation ratio calculated under section 99.991, less any amount payable under paragraph (b) and less any amount payable under paragraph (c) multiplied by the allocation ratio.

99.98(3) If the calculation under paragraph (2)(d) results in a negative figure for a member, former member or persons entitled to benefits or payments through a member or former member, the amount payable under that paragraph shall be 0.

99.98(4) If there are insufficient funds to allocate fully, but sufficient funds to allocate partly the amounts provided for under paragraph (2)(a), (b), or (c), as the case may be, the amount to be allocated to each person shall be calculated by multiplying the full amount to which the person would have been entitled by the quotient obtained by dividing the amount of funds available to be allocated to the group under that paragraph by the amount of funds that would be required to allocate fully the amounts to the group under that paragraph.

99.98(5) The amount available at the distribution date for the person entitled to a benefit shall be the amount determined in accordance with subsections (2), (3) and (4), reduced by the amount paid to the member or former member or persons entitled to benefits or payments through the member or former member, between the effective date of the wind-up and the distribution date, adjusted with interest based on the interest rate determined in accordance with paragraph 99.99(3)(c).

99.98(6) If the calculation under subsection (5) results in a negative figure for a person entitled to a benefit, the amount available at the distribution date for that person under that subsection shall be 0.

Distribution of assets - commuted value

99.99(1) For the purpose of the wind-up of either pension plan, the commuted value of a benefit as of the effective date of the wind-up, in respect of a member or former member who requires a transfer under paragraph 36(1)(a), shall be determined as if the pension plan were fully funded on a wind-up basis and shall not be less than the amount referred to in paragraph 19(4)(b) of Regulation 91-195 determined as if the transfer occurred on the effective date of the wind-up, or a lesser amount approved by the Superintendent.

99.99(2) For the purpose of the wind-up of either pension plan, the commuted value of a benefit as of the effective date of the wind-up, in respect of a person who is receiving a pension at the wind-up date or in respect of a member or former member who requires a purchase under paragraph 36(1)(b), shall not be less than the sum of the present value of payments made between the effective date of the wind-up and the distribution date, and the present value of the amount required to purchase the annuity referred to in paragraph 19(4)(b) of Regulation 91-195 as at the distribution date, or a lesser amount approved by the Superintendent.

99.99(3) The amounts referred to in subsection (2) shall be determined as follows:

(a)  as if the pension plan were fully funded on a wind-up basis;

(b)  taking into account the survival of the member, former member, or persons entitled to benefits through members or former members, from the effective date of the wind-up to the distribution date;

(c)  using the interest rate that would apply to an annuity purchase referred to in paragraph 19(4)(b) of Regulation 91-195 on the effective date of the wind-up to discount values from the distribution date to the effective date of the wind-up; and

(d)  any other adjustments approved by the Superintendent.

Distribution of assets - allocation ratio

99.991 The allocation ratio referred to in paragraph 99.98(2)(d) is calculated as follows:

(a)  if there are sufficient funds to pay all amounts due under paragraphs 99.98(2)(a), (b), (c), and (d), the ratio is 1;

(b)  if there are insufficient funds to allocate fully, but sufficient funds to allocate partly the amounts provided for under paragraph 99.98(2)(d), the ratio is the percentage required to allocate the remaining funds; and

(c)  if there are no funds remaining after making the allocation due under paragraphs 99.98(2)(a), (b) and (c), the ratio is 0.

Immunity

99.992 No action for damages or other proceeding shall be instituted against Her Majesty in right of the Province, the Minister, the Superintendent, or the administrator of either pension plan in relation to anything done or purported to be done in good faith, or in relation to anything omitted in good faith, while acting under the authority of this Act or the regulations with respect to a decrease in the value of the assets in the pension fund of either pension plan.