Transfer Agreement - Order in Council 611/2018
This divestment pension transfer agreement made as of the [day] of [month], 2018
This Agreement (as defined herein) is between:
the Workplace Safety and Insurance Board (WSIB), as the predecessor employer of the Eligible Persons (as defined herein) and the administrator of the Workplace Safety and Insurance Board Employees’ Pension Plan (WSIB Plan); and
the Investment Management Corporation of Ontario (IMCO), as the successor employer of the Eligible Persons (as defined herein); and
the Ontario Pension Board (OPB), as the administrator of the Public Service Pension Plan (PSPP);
Whereas, IMCO (as defined herein) was established on July 1, 2016 by proclamation of the Investment Management Corporation of Ontario Act, 2015;
Whereas, pursuant to a divestment of business from WSIB (as defined herein) to IMCO, the Transferring Employees (as defined herein) ceased employment with WSIB on July 23, 2017 and were offered and accepted employment with IMCO effective July 24, 2017;
Whereas, pursuant to their offer of employment from IMCO, and the agreement to transfer investment responsibilities from WSIB to IMCO, the Transferring Employees were enrolled in the PSPP effective July 24, 2017;
Whereas, the transfer of business and employment constituted a transaction described under subsection 80(2) of the Pension Benefits Act (Ontario);
Whereas, WSIB is the administrator of the WSIB Plan (as defined herein) and was the employer of the Eligible Persons who participated in the WSIB Plan immediately prior to their employment with IMCO;
Whereas, IMCO became a participating employer in the PSPP (as defined herein) effective July 1, 2016;
Whereas, the Parties (as defined herein) wish to enter into this Agreement pursuant to subsections 80(6) and 80(13) of the Pension Benefits Act (Ontario) to provide for the transfer of assets from the WSIB Plan to the PSPP in respect of those Eligible Persons (as defined herein) who elect to transfer past service from the WSIB Plan to the PSPP;
Now therefore, the Parties agree as follows:
- Definitions
In this Agreement, the following terms shall have the meaning ascribed to them:
- “Actuarial Present Value”
- means the present value of benefits to be paid in the future, calculated in accordance with accepted actuarial methods and assumptions, which for greater certainty shall include the Common Assumptions or the PSPP Funding Assumptions when required by this Agreement.
- “Agreement”
- means this divestment pension transfer agreement between the Parties.
- “Common Assumptions”
- means the going concern methods and actuarial assumptions agreed to by the Parties set out in Schedule A for the purposes of certain calculations required under sections 6 and 8 herein. For greater certainty, the Common Assumptions shall not be used for the purpose of determining the Transfer Amount, which shall be calculated in accordance with section 9 of the Regulation on a solvency basis.
- “Consent Date”
- means the date the Superintendent provides consent to the Transfer in accordance with subsection 80(10) of the PBA.
- “Credit Top-Up”
- means, with respect to an Eligible Person, the greater of (i) the WSIB Credit less the Transfer Credit and less the Transferable CV Test Credit, and (ii) zero. For greater certainty, the Credit Top-Up shall not include the Overlap Credit.
- “CV Difference”
- means the greater of (i) the WSIB Commuted Value less the PSPP Commuted Value, and (ii) zero.
- “Divestment”
- means the transaction that occurred on July 24, 2017 that involved the transfer of the employment of Transferring Employees from WSIB to IMCO.
- “Divestment Date”
- means July 24, 2017.
- “Election Form”
- means the form, as agreed to by both WSIB and OPB, used by an Eligible Person to elect to participate in the Transfer under this Agreement.
- “Eligible Person”
- means a Transferring Employee who meets the conditions for eligibility set out in section 4.2.
- “Excess CV Amount”
- means, with respect to a Transferring Member, greater of (i) the WSIB Commuted Value less the PSPP Commuted Value and less the Transferable CV Test Credit Value, and (ii) zero.
- “Full CV Test Credit”
- means the amount of credit that, if added to the Transfer Credit, would increase the PSPP Commuted Value by an amount equal to the CV Difference.
- “IMCO”
- means the Investment Management Corporation of Ontario.
- “ITA”
- means the Income Tax Act (Canada) and the regulations thereunder, as amended from time to time.
- “OPB”
- means the Ontario Pension Board.
- “Overlap Amount”
- means the Actuarial Present Value of the pension and ancillary benefits the Eligible Person has accrued under the WSIB Plan as at the Divestment Date in respect of the Overlap Credit calculated in accordance with section 7 of the Regulation and the commuted value calculation provisions and procedures of the WSIB Plan.
- “Overlap Credit”
- means an Eligible Person’s credit for which pension and ancillary benefits have accrued under the WSIB Plan in respect of time before the Divestment Date that, if aggregated with the Prior PSPP Credit, would cause an Eligible Person to have more than one year of credit in respect of any calendar year.
- “Parties”
- means OPB, WSIB, and IMCO.
- “Party”
- means OPB, WSIB, or IMCO, as the case may be.
- “PBA”
- means the Pension Benefits Act (Ontario) and the regulations thereunder, as amended from time to time.
- “Prior PSPP Credit”
- means the Eligible Person’s credit for which pension and ancillary benefits have accrued under the PSPP in respect of the period of time before the Divestment Date.
- “PSPP”
- means the Public Service Pension Plan.
- “PSPP Benefit Value”
- means, with respect to an Eligible Person, the amount calculated in accordance with the Common Assumptions as (a) less (b) where:
- is the Actuarial Present Value of the Eligible Person’s total pension and ancillary benefits determined under the PSPP as at the Divestment Date using: (i) the WSIB Credit and the Prior PSPP Credit, if any; and (ii) the earnings history of the Eligible Person that would be recognized in the PSPP following the Transfer; and
- is the Actuarial Present Value of the pension and ancillary benefits the Eligible Person has accrued under the PSPP prior to the Divestment Date, if applicable.
- “PSPP Commuted Value”
- means, with respect to an Eligible Person, the amount calculated in accordance with section 7 of the Regulation and the commuted value calculation provisions and procedures of the PSPP as (a) less (b) where:
- is the Actuarial Present Value of the Eligible Person’s total pension and ancillary benefits determined under the PSPP as at the Divestment Date using: (i) the Transfer Credit and the Prior PSPP Credit, if any; and (ii) the earnings history of the Eligible Person that would be recognized in the PSPP following the Transfer; and
- is the Actuarial Present Value of the pension and ancillary benefits the Eligible Person has accrued under the PSPP prior to the Divestment Date, if applicable.
- “PSPP Funding Assumptions”
- means the going concern methods and actuarial assumptions agreed to by the Parties set out in Schedule B for the purposes of certain calculations required under section 11.5 herein. For greater certainty, the PSPP Funding Assumptions shall not be used for the purpose of determining the Transfer Amount, which shall be calculated in accordance with section 9 of the Regulation on a solvency basis.
- “Regulation”
- means Ontario Regulation 310/13 made under the PBA (Asset Transfers under Sections 80 and 81 of the Act), as amended from time to time.
- “Retirement Compensation Arrangement”
- means a retirement compensation arrangement as defined in subsection 248(1) of the ITA.
- “Shortfall Amount”
- means, if positive, (a) less (b) where (a) is calculated in accordance with the PSPP Funding Assumptions set out in Schedule B, and where:
- is the sum of the Actuarial Present Value of each Transferring Member’s total pension and ancillary benefits determined under the PSPP as at the Divestment Date using:
- the Transfer Credit and the Transferrable CV Test Credit, if any; and
- the earnings history of the Transferring Member that would be recognized by the PSPP following the Transfer; and
- is the Transfer Amount as of the Divestment Date, as described in section 10.1.
- is the sum of the Actuarial Present Value of each Transferring Member’s total pension and ancillary benefits determined under the PSPP as at the Divestment Date using:
- “Superintendent”
- means the Superintendent of Financial Services, or a duly appointed successor responsible for the enforcement and regulation of the PBA.
- “Transfer”
- means the payment of the Transfer Amount plus interest, as authorized in accordance with section 8, together with the transfer of the associated actuarial liabilities in respect of all Transferring Members.
- “Transfer Amount”
- means the amount of assets to be transferred from the WSIB Plan to the PSPP determined as of the Divestment Date and calculated strictly in accordance with section 9 of the Regulation.
- “Transfer Credit”
- means the sum of (a) and (b) where
- is the WSIB Credit, multiplied by the lesser of (i) one, and (ii) the WSIB Benefit Value divided by the PSPP Benefit Value; and
- is the additional credit required, if any, to satisfy the accrued pension benefit requirement of section 14 of the Regulation as at the Divestment Date.
- “Transfer Notice”
- means the notice to be provided to an Eligible Person in accordance with subsection 79.2(7) of the PBA, sections 16 and 17 of the Regulation and section 7 herein.
- “Transferable CV Test Credit”
- means the lesser of (i) the WSIB Credit less the Transfer Credit, and (ii) the Full CV Test Credit.
- “Transferable CV Test Credit Value”
- means, with respect to an Eligible Person, the amount calculated in accordance with section 7 of the Regulation and the commuted value calculation provisions and related procedures of the PSPP as (a) less (b) where:
- is the Actuarial Present Value of the Eligible Person’s pension and ancillary benefits determined under the PSPP as at the Divestment Date using: (i) the Prior PSPP Credit, the Transfer Credit and the Transferable CV Test Credit; and (ii) the earnings history of the Eligible Person that would be recognized in the PSPP following the Transfer; and
- is the Actuarial Present Value of the Eligible Person’s pension and ancillary benefits determined under the PSPP as at the Divestment Date using i) the Prior PSPP Credit and the Transfer Credit and (ii) the earnings history of the Eligible Person that would be recognized in the PSPP following the Transfer.
- “Transferring Employee”
- means an employee who was transferred from employment with WSIB to employment with IMCO on the Divestment Date.
- “Transferring Member”
- means an Eligible Person who has elected to participate in the Transfer in accordance with this Agreement.
- “Union Notice”
- means the notice to be provided to each trade union and advisory committee in accordance with subsection 79.2(7) of the PBA, section 16 of the Regulation, and section 7 herein.
- “WSIB”
- means the Workplace Safety and Insurance Board.
- “WSIB Benefit Value”
- means the Actuarial Present Value of the pension and ancillary benefits that the Eligible Person has accrued under the WSIB Plan as at the Divestment Date in respect of the WSIB Credit calculated in accordance with the Common Assumptions.
- “WSIB Commuted Value”
- means the Actuarial Present Value of the pension and ancillary benefits that the Eligible Person has accrued under the WSIB Plan as at the Divestment Date in respect of the WSIB Credit calculated in accordance with section 7 of the Regulation and the commuted value calculation provisions and related procedures of the WSIB Plan.
- “WSIB Credit”
- means an Eligible Person’s credit for which pension and ancillary benefits have accrued under the WSIB Plan in respect of time before the Divestment Date, excluding Overlap Credit, if any.
- “WSIB Plan”
- means the Workplace Safety and Insurance Board Employees’ Pension Plan.
- Transfer agreements for purposes of PBA
- The Parties agree that this Agreement constitutes the employers’ agreement between WSIB and IMCO required pursuant to subsection 80(6) and paragraph 80(13)1 of the PBA. The Parties agree that the WSIB shall transfer to IMCO the responsibility for providing pension benefits and other benefits under the WSIB Plan for Transferring Members together with assets from the WSIB Plan to the PSPP in connection with the transfer of responsibility.
- The Parties agree that this Agreement constitutes the administrators’ agreement between WSIB and OPB required pursuant to paragraph 80(13)3 of the PBA.
- Treatment of transferring employees whose pension and ancillary benefits are not transferred
- Transferring Employees who do not make an election or, pursuant to section 4.3 below and subject to applicable law, are prevented from making an election under this Agreement to transfer service and assets from the WSIB Plan to the PSPP, shall continue to be entitled to the rights and protections under section 80 of the PBA, including the right to have service with WSIB taken into account for purposes of eligibility for benefits under the PSPP and the right to have service with IMCO taken into account for purposes of eligibility for benefits under the WSIB Plan.
- Eligibility of eligible persons to elect to participate in the transfer
- The Transfer under this Agreement is not mandatory. An Eligible Person as described in this section 4 shall be given the opportunity to elect to participate in the Transfer under this Agreement from the WSIB Plan to the PSPP in respect of the Eligible Person’s pension benefits accrued under the WSIB Plan.
- Subject to section 4.3, a Transferring Employee becomes an Eligible Person if that person:
- ceased to contribute to the WSIB Plan on July 23, 2017 and commenced participation in the PSPP on the Divestment Date in connection with the Divestment; and
- is employed with IMCO and participates in the PSPP at all times from the Divestment Date to the date OPB receives the Transferring Employee’s completed Election Form.
- Notwithstanding if a Transferring Employee otherwise meets the conditions for eligibility set out in subsections 4.2(a) and (b), in circumstances which:
- the Transferring Employee is subject to a court order under the Family Law Act, family arbitration award or domestic contract for the division of pension or pension benefits upon marital/spousal relationship breakdown that contains a provision that prohibits the transfer or alteration of the individual’s pension benefits,
- the Transferring Employee is subject to an order providing for support enforceable in Ontario against the individual’s pension benefits, or
- there are other impediments to a Transferring Employee’s ability to elect to participate in the Transfer under the terms of either the PSPP or the WSIB Plan, the PBA or other applicable law,
WSIB and OPB shall consult together and may, if they agree, and subject to applicable law, impose additional conditions that must be met before the person will be considered an Eligible Person.
- Notwithstanding section 4.2, if a Transferring Employee is or becomes subject to impediments that would preclude such Transferring Employee from electing to participate in the Transfer, as recognized by both WSIB and OPB under section 4.3, created by such Transferring Employee’s individual circumstances in relation to the terms of either the PSPP or the WSIB Plan, the PBA or other applicable law and those impediments are not resolved prior to the end of the period set out under section 7.6 in which Transferring Employees may elect to participate in the Transfer, the person will cease to be eligible to participate in the Transfer, subject to applicable law.
- Transfer of data for eligible persons
- Within such period as WSIB and OPB agree, WSIB shall provide OPB with all the data identified and reasonably required by OPB to calculate the values identified in section 6.2 in relation to an Eligible Person.
- Within such period as WSIB and OPB agree, OPB shall provide WSIB with all the data identified and reasonably required by WSIB to calculate the values identified in section 6.1 in relation to an Eligible Person.
- Within such period as WSIB and OPB agree, WSIB shall provide OPB with any additional data identified and reasonably required by OPB to administer the pension and ancillary benefits of a Transferring Member after the Transfer is completed.
- Calculation of benefit values for eligible persons
- WSIB shall calculate, for each Eligible Person, the WSIB Benefit Value, the WSIB Commuted Value, and the Overlap Amount. For purposes of calculating the Overlap Amount, OPB shall provide WSIB with all relevant information relating to the Eligible Person’s Prior PSPP Credit.
- OPB shall calculate, for each Eligible Person, the PSPP Benefit Value, the PSPP Commuted Value and the Transferable CV Test Credit Value.
- The values calculated in sections 6.1 and 6.2 shall not include pension or ancillary benefits which exceed the limits imposed by the ITA in force at the time the values are calculated as those limits are applied to the applicable plan. For greater certainty, benefits provided to Eligible Persons under a Retirement Compensation Arrangement or any other unregistered supplemental benefit arrangements are not covered by this Agreement.
- All calculations required to be completed under the PBA and the Regulation shall be performed in accordance with the prescribed calculations set out in the Regulation.
- Transfer notice to and election to transfer by eligible persons
- WSIB shall provide each Eligible Person with a Transfer Notice containing the information prescribed in paragraphs 16(3)1., 17(2)1. and 2. and subsection 17(4) of the Regulation.
- OPB shall provide each Eligible Person with a Transfer Notice containing the information prescribed in paragraphs 16(3) 2., 17(2)3. and subsection 17(4) of the Regulation.
- The Transfer Notices in sections 7.1 and 7.2 shall be provided at such time as WSIB and OPB may agree but which time shall be no later than 6 months after the Divestment Date. OPB shall provide an Election Form to an Eligible Person along with the Transfer Notice set out in section 7.2. OPB shall notify IMCO when the Transfer Notices are distributed to the Eligible Persons.
- An Eligible Person who has been sent both Transfer Notices and an Election Form may elect to participate in the Transfer by completing, signing and delivering the Election Form to OPB by the election deadline set out in the Election Form. The election deadline shall be a date agreed to by WSIB and OPB, but in no case will the deadline be earlier than 90 days after the date on which the Transfer Notices are sent to the Eligible Person.
- If an Eligible Person does not deliver the Election Form within the time period specified in section 7.4, the Eligible Person will no longer be eligible to participate in the Transfer under this Agreement and shall only be a Transferring Employee for purposes of this Agreement.
- If a Transferring Employee ceases to be an Eligible Person and is no longer eligible to participate in the Transfer under this Agreement pursuant to section 4.4 or section 7.5, OPB shall notify the Transferring Employee of this fact and provide a copy of that notice to WSIB.
- OPB shall provide a copy of each completed Election Form to WSIB. OPB shall provide IMCO a list of the Eligible Persons who elect to participate in the Transfer.
- WSIB shall provide each trade union and advisory committee with a Union Notice containing the information prescribed in paragraph 16(4)1 of the Regulation.
- OPB shall provide each trade union with a Union Notice containing the information prescribed in paragraph 16(4)2 of the Regulation.
- Service credited in the PSPP for transferring members
- Following the Transfer, OPB will establish the Transfer Credit and the Transferable CV Test Credit as credit in the PSPP in respect of the Transferring Member. Following the Transfer, the Credit Top-Up shall be recognized by the PSPP, in accordance with the provisions of the PSPP for the purposes of determining the Transferring Member’s eligibility for ancillary benefits in the PSPP.
- The Transfer Credit and the Transferable CV Test Credit shall be attributed to the same time period for which the Transferring Member accrued the WSIB Credit or in the case where the Transfer Credit plus the Transferable CV Test Credit is less than the WSIB Credit, to the most recent time period(s) during which the Transferring Member accrued the WSIB Credit.
- Establishment of benefits for transferring members in accordance with the terms of the PSPP
- Following the Transfer, and pursuant to the terms of this Agreement, pension and ancillary benefits of the Transferring Member shall be exclusively determined in accordance with the terms of the PSPP.
- OPB shall use the Transferring Member’s relevant information while a member of the WSIB Plan to calculate pension and ancillary benefit entitlements under the PSPP.
- Following the Transfer, eligibility for benefits, if any, payable upon the Transferring Member’s death will be exclusively determined in accordance with the terms of the PSPP (including any beneficiary designations made in accordance with the terms of the PSPP), the PBA and the ITA.
- Application for superintendent consent and other regulatory filings
- WSIB shall instruct its actuary to calculate the Transfer Amount in respect of all Transferring Members. For greater certainty, the Common Assumptions and the PSPP Funding Assumptions shall not be used for purposes of calculating the Transfer Amount, which shall be determined on a solvency basis, in accordance with section 9 of the Regulation, using accepted actuarial methods and assumptions.
- WSIB shall instruct its actuary to prepare an actuarial valuation report for the WSIB Plan as of the Divestment Date setting out all such amounts and information as required by paragraph 4 of subsection 1(1) of Schedule 1 of the Regulation, using accepted actuarial methods and assumptions. Such valuation report shall be prepared following the deadline for all Eligible Persons to elect to participate in the Transfer and provided to OPB and IMCO in draft form. OPB and IMCO shall have 14 days to review the valuation report and notify WSIB as to their agreement or disagreement with respect to the statement of the Transfer Amount in the valuation report. WSIB shall provide OPB with the final report for purposes of the application for the Superintendent’s consent to the Transfer and shall provide IMCO a copy of the final report for its records. For purposes of facilitating the disclosure of the draft report in accordance with this section 10.2, OPB and IMCO shall execute a non-disclosure and non-reliance agreement in a form mutually agreeable to the Parties.
- OPB shall instruct its actuary to prepare an actuarial valuation report for PSPP effective as of the Divestment Date setting out the amounts as required by paragraph 5 of subsection 1(1) of Schedule 1 of the Regulation, using accepted actuarial methods and assumptions. Such valuation report shall be prepared following the deadline for all Eligible Persons to elect the Transfer.
- OPB shall ensure that the PSPP valuation report shall demonstrate to the satisfaction of the Superintendent that, after the Transfer pursuant to this Agreement, the solvency ratio of the PSPP shall be either (i) at least 0.85 or (ii) no more than 0.05 below the solvency ratio of the WSIB Plan before the Transfer, and no more than 0.05 below the solvency ratio of the PSPP before the Transfer.
- Notwithstanding sections 10.2 to 10.4, if the actuarial valuation reports referenced in those sections cease to be required under the PBA such other report, information or document as is required under the PBA shall be substituted for the actuarial reports referenced in sections 10.2 to 10.4.
- OPB shall prepare the application for the Superintendent’s consent to the Transfer in accordance with subsection 80(11) of the PBA and section 5 of the Regulation. OPB shall provide a draft application to WSIB within 7 months of the Divestment Date, or such other period as OPB and WSIB agree, except that the draft shall not include the actuarial reports discussed in sections 10.2 and 10.3 above. WSIB shall provide any comments on the draft application within 30 days of receipt of the draft application from OPB.
- Within 9 months of the Divestment Date, or at such other time as the Superintendent directs following a joint submission by WSIB and OPB of a request to the Superintendent for an extension to the deadline for filing the application, OPB shall file with the Superintendent the application for the Superintendent’s consent to the Transfer in accordance with subsection 80(11) of the PBA and section 5 of the Regulation. OPB shall immediately provide a copy of the filed application to both WSIB and IMCO.
- OPB shall notify WSIB within 1 business day of any question or request for additional information made by the Superintendent and the Parties shall cooperate for purposes of responding to any such request.
- Upon receipt of the consent of the Superintendent to the Transfer, OPB shall provide a copy to WSIB and IMCO and the calculations described in section 11 shall be prepared.
- Within 60 days after the Transfer has been completed WSIB and OPB shall each file with the Superintendent the documents required by section 6 of the Regulation in respect of the WSIB Plan and the PSPP, as applicable.
- Calculation and payment of transfer amount and related amounts
- Within 60 days following the Consent Date, WSIB shall confirm the calculation of the Transfer Amount set out in section 10.1 and shall update the Transfer Amount plus interest up to the anticipated date of the Transfer. WSIB shall provide OPB and IMCO with the calculation of the Transfer Amount, plus interest and OPB and IMCO shall have 14 days to confirm or dispute the calculation. If either of OPB or IMCO disputes the calculation, the Parties shall engage the dispute resolution provisions under this Agreement to resolve the dispute. The final calculation of the Transfer Amount, plus interest, once confirmed by OPB and IMCO or any dispute is resolved, shall be final and binding on the Parties.
- As soon as practicable, which shall in any event not be more than 120 days after the Consent Date, WSIB shall:
- authorize payment from the WSIB Plan to the PSPP an amount equal to the Transfer Amount, plus interest;
- pay the Overlap Amount, if any, plus interest as determined by WSIB, in respect of the Transferring Member in accordance with subsections 79.2(8) and 79.2(9) of the PBA, as applicable; and
- pay the Excess CV Amount, if any, plus interest as determined by WSIB in respect of the Transferring Member in accordance with subsections 79.2(8) and 79.2(9) of the PBA, as applicable.
- For the purposes of subsection 11.2(a), interest shall:
- equal an amount of interest on the Transfer Amount spanning from the Divestment Date to the end of the month preceding the date on which the Transfer is completed; and
- be calculated using the gross solvency interest rate used for purposes of calculating the Transfer Amount as at the Divestment Date.
For greater certainty, interest shall be calculated by the WSIB Plan’s actuary and the calculation shall be reviewed by the PSPP’s actuary to confirm or dispute the calculation. If OPB disputes the calculation, the Parties shall engage the dispute resolution provisions under this Agreement to resolve the dispute.
- Within 60 days of the Consent Date, OPB shall calculate the Shortfall Amount and shall update the Shortfall Amount with interest up to the anticipated date of payment in accordance with section 11.6. OPB shall provide WSIB and IMCO with the calculation of the Shortfall Amount plus interest and WSIB and IMCO shall have 14 days to confirm or dispute the calculation. If WSIB or IMCO disputes the calculation, the Parties shall engage the dispute resolution provisions under this Agreement to resolve the dispute. The final calculation of the Shortfall Amount plus interest, once confirmed by IMCO and WSIB or any dispute is resolved, shall be final and binding on the Parties. For greater certainty, WSIB shall not have any obligation or liability to make any payment to the PSPP in respect of the Transferring Members other than the Transfer Amount plus interest; however, the Parties agree that IMCO will recover any such amounts in accordance with the arrangements and agreements between the Parties.
- As soon as practicable following confirmation of the Shortfall Amount pursuant to section 11.4, IMCO shall authorize payment from IMCO to the PSPP in an amount equal to the Shortfall Amount, plus interest.
- For the purposes of section 11.5, interest shall:
- equal an amount of interest on the Shortfall Amount spanning from the Divestment Date to the end of the month preceding the date on which payment of the Shortfall Amount is paid; and
- be calculated at the rate of 5.50% per year.
- Assignment of benefits
- In the event that a Transferring Member’s accrued benefits under the WSIB Plan have been assigned following a marital/spousal relationship breakdown, OPB and WSIB shall take all reasonable steps to ensure that the benefits are administered in accordance with the PBA and ITA.
- WSIB shall provide to OPB any information required by OPB in order to take the steps contemplated under section 12.1.
- Notice to transferring member
- Within 60 days of the completion of the Transfer, OPB shall provide the Transferring Member with written confirmation that the Transfer is complete and that the Transferring Member’s records under the PSPP have been adjusted accordingly.
- Records
- Each Party agrees to maintain and provide to the other Party records concerning all matters under this Agreement, and for such purposes, agrees to act in accordance with the requirements and standards of applicable legislation and industry practices. With respect to personal information about plan members provided by one Party to another for the purpose of fulfilling the objects of this Agreement, the Party receiving the personal information agrees that it shall maintain and use such information only for the purposes for which it collects, uses and maintains personal information about its own plan members, and shall apply the same standards of privacy protection, retention and destruction as it does with respect to personal information about its own plan members.
- Release and discharge of WSIB
- Following completion of the Transfer and all related actions contemplated by this Agreement, OPB shall release and irrevocably discharge the WSIB Plan and WSIB from any and all actions, causes of action, claims and demands made by, on behalf of or through a Transferring Member in connection with the WSIB Credit; provided that this release and discharge shall not cover any actions, causes of action, claims or demands to the extent they relate to any errors or omissions by WSIB that affect the amount of the Transfer Amount, the WSIB Benefit Value, the Overlap Amount, the WSIB Commuted Value, or the Shortfall Amount not reasonably capable of being identified by OPB in the course of the review of the actuarial reports and related calculations required by this Agreement. For greater certainty, and notwithstanding the foregoing sentence, following the Transfer, WSIB is discharged in accordance with subsections 79.2(11) and (14) of the PBA and, specifically, the Transfer and related payments under this Agreement shall constitute full satisfaction of any liabilities of Transferring Members under the WSIB Plan.
- Obligations of the administrators
- All obligations of the WSIB Plan or the PSPP as described in this Agreement shall be the responsibility of, and carried out by, WSIB or OPB, as applicable, as the administrators of the WSIB Plan and the PSPP, respectively.
- Compliance with legislation
- This Agreement shall be administered in compliance with all relevant legislation of Canada and the Province of Ontario.
- Dispute resolution regarding calculations
- If OPB, WSIB, or IMCO disagree with respect to the calculations required herein, the Parties shall negotiate in good faith, using commercially reasonable efforts, to promptly resolve the dispute. If the Parties are unable to resolve the dispute within 30 days after a Party gives notice of its disagreement, the issue shall be referred to and settled by such other independent actuary as the Parties may agree and the costs and expenses of such independent actuary shall be shared equally by OPB and WSIB.
- Directions and notice requirements
- All notices, requests and other communications to any Party hereunder: (i) shall be in writing signed by or on behalf of the Party making the same; (ii) shall be deemed to have been duly given (A) on the date of delivery when delivered personally, (B) on the third business day after being deposited in the mail if sent by registered or certified mail, postage prepaid, return receipt requested, (C) on the first business day after being deposited with a reputable national overnight courier service, or (D) on the same business day if sent by electronic mail, unless sent on a weekend or holiday in which case the notice shall be deemed to be received on the next business day; and (iii) shall be addressed to each party at the following addresses:
To OPB:
OPB
200 King Street West, Suite 2200
Toronto, Ontario M5H 3X6To WSIB:
WSIB Pensions Department
200 Front Street West, 21st Floor
Toronto, Ontario M5V 3J1To IMCO:
IMCO
200 King Street West, Suite 2300
Toronto, Ontario M5H 3T4
- All notices, requests and other communications to any Party hereunder: (i) shall be in writing signed by or on behalf of the Party making the same; (ii) shall be deemed to have been duly given (A) on the date of delivery when delivered personally, (B) on the third business day after being deposited in the mail if sent by registered or certified mail, postage prepaid, return receipt requested, (C) on the first business day after being deposited with a reputable national overnight courier service, or (D) on the same business day if sent by electronic mail, unless sent on a weekend or holiday in which case the notice shall be deemed to be received on the next business day; and (iii) shall be addressed to each party at the following addresses:
- Amendment or termination of agreement
- This Agreement may be amended or modified at any time by agreement in writing executed by all of the Parties and at any time a Party may terminate this Agreement upon one month’s notice in writing to the other Parties, provided that in no case can a Party terminate this Agreement following the distribution of the Transfer Notices to the Eligible Persons. No course of conduct or failure or delay by any Party in exercising any right, power or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege.
- This Agreement shall also terminate in the event that the application for the Superintendent’s consent to the Transfer is denied on the basis that the Transfer does not comply with the PBA or the Regulations.
- This Agreement will expire in the event that no Eligible Person elects to become a Transferring Member within the period for making such an election.
- Sections 3 and 14 shall survive the termination or expiration of this Agreement in accordance with sections 20.1, 20.2, or 20.3 above.
- This Agreement shall survive the completion of the Transfer.
- Assignment
- Neither this Agreement nor any rights or obligations hereunder shall be assignable by any Party without the prior written consent of the other Parties.
- Effective date
- For the purposes of section 3 of the Regulation, the effective date of the Transfer is the Divestment Date.
- Interpretation
- The headings used in this Agreement are for convenience only and are not to be considered part of this Agreement and do not in any way limit or amplify the terms and provisions of this Agreement.
- Unless noted otherwise, references to sections made throughout this Agreement are to sections in this Agreement.
- In this Agreement, except to the extent otherwise provided herein or the context otherwise requires: (i) the definition of terms herein shall apply equally to the singular and the plural; (ii) any pronoun shall include the corresponding masculine, feminine and neuter forms; (iii) the words “include,” “includes” or “including” shall be deemed to be followed by the words “without limitation”; (iv) the words “herein,” “hereof,” “hereto,” “hereunder” and words of similar import shall be deemed references to this Agreement as a whole and not to any particular Section or other provision of this Agreement; and (v) the use of the word “or” is not intended to be exclusive unless expressly indicated otherwise; (vi) the words “will” and “shall” have equal force and effect.
- Each Party acknowledges and agrees that the Parties have participated jointly in the negotiation and drafting of this Agreement. In the event that an ambiguity or a question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the Parties, and no presumption or burden of proof shall arise favouring or disfavouring any Party by virtue of the authorship of any provision of this Agreement.
- It is intended that all provisions of this Agreement shall be fully binding and effective between the Parties, but in the event that any particular provision is found to be void, voidable or unenforceable, in whole or in part, for any reason whatsoever, then the provision, as affected, shall be deemed severed from the remainder of this Agreement and all other provisions of this Agreement shall remain in full force. Upon such a determination, the Parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the Parties as closely as possible in a mutually acceptable manner.
- This Agreement shall be governed by and construed in accordance with the laws of the Province of Ontario and the laws of Canada applicable therein.
- This Agreement shall enure to the benefit of and be binding upon the successors and any permitted assigns of the Parties.
- References to the terms of the WSIB Plan or the terms of the PSPP in this Agreement are inclusive of any relevant polices or practices of WSIB or OPB whether written or otherwise, as applicable, and each Party is required to disclose any such policies or practices to the other Party to the extent relevant and necessary for purposes of implementing this Agreement.
- Counterparts
- This Agreement, and any amendment made under section 20.1, may be executed in counterparts, each of which shall be deemed to be an original, but all of which, taken together, shall constitute one and the same Agreement.
In witness whereof, the Parties have executed this Agreement as of the date written below.
Workplace safety and insurance board
By: [Original Signed by]
Name: Thomas Teahen
Title: President & CEO
Date: February 12, 2018
Investment management corporation of ontario
By: [Original Signed by]
Name: Gayle Fisher
Title: Chief Human Resources Officer & Head of Corporate Services
Date: February 13, 2018
Ontario pension board
By:______________
Name: Mark Fuller
Title: President & CEO
Date ____________
By:______________
Name: Peter Shena
Title: EVP & Chief Pension Officer
Date ___________
Schedule A
Common assumptions
- Actuarial method
The actuarial method is the “Projected unit credit actuarial cost method”. - Actuarial assumptions
- Post-retirement mortality and percentage married:
Mortality rates equal to the 2014 Canadian Pensioners Mortality Table (CPM2014) combined with mortality improvement scale CPM Improvement Scale B (CPM-B).
A unisex table represented by 40% male mortality and 60% female mortality will be adopted.
No size adjustment factor is applied.
It is also assumed that 80% of plan members are married at retirement with spouse of the same age and no children eligible for a survivor pension. Spouses’ mortality rates are represented by 60% male mortality and 40% female mortality. - Real discount rate:
3.65% per annum - Nominal discount rate:
5.65% per annum - Rate of interest on employee contributions:
2.00% per annum - Rate of increase in the Consumer Price Index (inflation):
2.00% per annum - Salary
WSIB Plan: The annual salary paid by WSIB to the Eligible Person immediately before the Divestment.
PSPP: The annual salary paid by IMCO to the Eligible Person immediately after the Divestment. - Rate of increase in salaries and in the Year’s Maximum Pensionable Earnings (YMPE) under the Canada Pension Plan:
Salaries: 3.25% per annum (Inflation plus 0.75% per annum for productivity gains and 0.50% per annum for career progression)
YMPE: 2.75% per annum (Inflation plus 0.75% per annum for productivity gains) - Defined benefit limit under the Income Tax Act (Canada):
The defined benefit limit at the assumed pension commencement date is projected to increase by 2.75% per annum from the defined benefit limit at the year of termination of employment. - Withdrawal rate: Nil
- Disability rate: Nil
- Pre-retirement mortality: Nil
- Retirement age:
The assumed retirement age is the sum of:- 70% of the member’s age at the earliest unreduced retirement date before considering any buyback provisions of the PSPP, plus
- 30% of the member’s age at the normal retirement date taking all eligible service into account.
- Indexing:
An explicit indexing assumption would be made which is consistent with the rate of indexing expected by a particular plan taking into account both contractual and ad hoc adjustments. The adjustment rate will be based on specifications provided by each plan, unless the plan already provides full contractual indexing. - 50% cost sharing:
The 50% cost sharing rule will be applied, although at retirement only, since there is no assumption for a pre-retirement event to occur. Nevertheless, the 50% cost sharing rule will be applied appropriately in respect to transferred service on subsequent cessation of employment.
- Post-retirement mortality and percentage married:
Schedule B
PSPP funding assumptions
Actuarial Method
The actuarial method is the “Projected unit credit actuarial cost method”.
Economic Assumptions
Increase in Consumer Price Index | 2.00% per year |
Increase in Year’s Maximum Pensionable Earnings (YMPE) | 2.75% per year |
Increase in maximum pension under ITA | 2.75% per year |
Increase in salaries - Active Members | 2.75% per year |
Members on Long-Term Income Protection (LTIP) | 2.00% per year |
Interest rate on Active Member contributions | 3.50% per year |
Discount Rate
Nominal rate | 5.50% per year |
Real rate | 3.50% per year |
Commuted value interest rate | 2.00% per year |
Commuted value mortality | CPM 2014 Combined Mortality Table, with allowance for future mortality improvement using CPM Improvement Scale B. |
Unisex Assumption | 60% male / 40% female |
Percentage of terminations electing a commuted value | 50% |
Promotional scale for increase in salaries
Attained Age (yrs) | Increase |
---|---|
20 – 26 | 7.50% |
27 | 6.50% |
28 | 5.50% |
29 | 4.50% |
30 – 31 | 3.50% |
32 | 2.50% |
33 – 40 | 1.00% |
41 – 48 | 0.25% |
49+ | 0.00% |
Demographic Assumptions
Retirement rates
Age | Rates Eligible for unreduced pension |
Rates Eligible for reduced pension |
---|---|---|
First unreduced Age | 40% | N/A |
55 | 25% | 0% |
56 | 25% | 0% |
57 | 25% | 0% |
58 | 25% | 0% |
59 | 25% | 0% |
60 | 25% | 0% |
61 | 20% | 0% |
62 | 20% | 0% |
63 | 20% | 0% |
64 | 45% | 0% |
65 | 100% | N/A |
Withdrawal Rates
Completed Service (yrs) | Annual Rate |
---|---|
<3 | 12% |
3 | 10% |
4 | 9% |
5 – 6 | 8% |
7 | 7% |
8 | 6% |
9 – 11 | 5% |
12 – 13 | 4% |
14 – 19 | 3% |
20+ | 2% |
Mortality Rates
CPM 2014 Combined Mortality Table, with allowance for future mortality improvement using CPM Improvement Scale B.
Percentage with a spouse
Non-retired members | 87% of males and 52% of females are assumed to have a spouse at retirement or death; female spouses assumed to be 3 years younger than member and male spouses assumed to be same age as member. |
Retired members | Actual marital status and spouse’s birth date. |
Footnotes
- footnote[1] Back to paragraph Net of investment/custodial and operating expenses
- footnote[*] Back to paragraph Age 60 or over with 20 or more years of pension credit or age plus pension credit totaling 90 or more.
- footnote[**] Back to paragraph No reduced retirements within one year of the first unreduced retirement age.