Special amortization payments and amortization payments

Note that...
  • The rules regarding pension plans of the university sector also apply to pension plans for Québec emergency medical technicians and early childhood centres (CPEs) and accredited private daycares in Québec.
  • Different rules can apply to pension plans covered by a special regulation.

Special amortization payments

If the actuary considers an amendment for the first time in an actuarial valuation showing the plan's degree of solvency to be less than 90%, the actuary must determine the special amortization payment, which corresponds to:

Minimum between the Value, on a solvency basis, of the additional obligations resulting from the amendment and the Sum required to ensure the plan's degree of solvency is at least 90% 

Amortization payments

Private sector pension plans

For each fiscal year or part thereof following the actuarial valuation date, the employer must make an amortization payment corresponding to:

Maximum between the Amortization payments on a solvency basis added to the Special amortization payment and the Amortization payment on an on-going basis

An employer can provide an irrevocable standby letter of credit in order to partially or fully release itself from the obligation to make amortization payments if the amount of the letter does not exceed the sum of the amortization payments on a solvency basis and the special amortization payment.

Pension plans of the municipal and university sectors

For the entire period covered by the actuarial valuation, the employer must make an amortization payment into the pension fund corresponding to:

Sum of Amortization payments on a funding basis and Special amortization payment, less any contributions settled by the reserve

The instructions to the administrator to reduce certain monthly payments, as provided for in section 8 of the Regulation respecting the funding of pension plans of the municipal and university sectors, must be considered, as applicable.

Legal references

Note that...

A municipal sector pension plan is a plan where the employer is a municipality, a body referred to in section 18 of the Act respecting the Pension Plan of Elected Municipal Officers or a municipal housing bureau.

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