Surplus

  1. In an ongoing plan, can an employer use surplus in the plan to take contribution holidays if the terms of the plan give plan members an entitlement to surplus on plan termination?

    An entitlement of members to surplus on plan termination does not give members a right to access or an entitlement to surplus in an on-going plan. An employer’s right to take a contribution holiday depends on the terms of the plan. The Pension Benefits Standards Act, 1985 does not prohibit an employer from taking a contribution holiday. OSFI’s instruction guide titled Preparation of Actuarial Reports for Defined Benefit Pension Plans sets out certain conditions for taking contribution holidays.