BERMUDA NATIONAL PENSION SCHEME (GENERAL) REGULATIONS 1999 BR 82 / 1999

Transcription

1 QUO FA T A F U E R N T BERMUDA NATIONAL PENSION SCHEME (GENERAL) REGULATIONS 1999 BR 82 / 1999 TABLE OF CONTENTS Citation Interpretation PART 1 PRELIMINARY PART II REGISTRATION AND ADMINISTRATION OF PENSION PLAN REGISTRATION Application for registration of pension plan Application for registration of aendent of pension plan Proof of participation in financial institution pension plan Issuance of notice of registration Issuance of notice of registration of aendent Annual inforation report PENSION FUND REQUIREMENTS Financial stateents Adinistrator to provide inforation to eligible persons, etc. STATEMENTS TO MEMBERS Annual stateent to ebers of pension plan Terination stateent - deferred pensions Terination stateent - refunds Stateent to survivor Stateent on retireent INFORMATION AVAILABLE ON REQUEST 1

2 Inforation available on request Notice of proposal to wind up Insufficiency after winding up Fees PART III WINDING UP PART IV SELF-EMPLOYMENT PENSION PLANS Interpretation Self-eployed person to register self-eployent pension plan Aount of contribution to self-eployent pension plan Non-application of regulation 21 to certain self-eployed persons Application of Act and Regulations to self-eployed persons PART V PENSION FUND INVESTMENTS Interpretation Duties of adinistrator Investent policies and goals Defined contribution pension plan Requireents for pension fund investent Mortgages, etc. Assets of pension fund Borrowing Investent in real estate Conflict of interest Prohibited investents Assets, etc. to be in nae of pension fund Acceptance of bonds, etc. by pension fund Transitional Interpretation PART VI ACTUARIAL AND FUND MANAGEMENT Funding of defined benefit plan Application for approval Notice of proposed transfer Defined contribution provisions A - INTERPRETATION B - Funding C - Sales, Transfers and New Plans Reports and Stateents 2

3 Defined benefit provisions - full transfers Defined benefit provisions - partial transfers Plan aendents Adinistrator to retain eber records Effective date D - Calculation of Assets and Liabilities and Reports Method of calculating assets and liabilities Initial valuation report Triennial report and solvency concerns Report on aendent of defined benefit plan Actuarial reports E - Suppleentary Provisions Protection of life annuity contracts Calculation of couted value Eployer holds oney in trust for eber FIRST SCHEDULE FORM NO. 1 APPLICATION FOR REGISTRATION OF A PENSION PLAN SECOND SCHEDULE The Minister of Finance, in exercise of the power conferred upon hi by section 69 of the National Pension Schee (Occupational Pensions) Act 1998 akes the following Regulations: PART 1 PRELIMINARY Citation 1 These Regulations ay be cited as the National Pension Schee (General) Regulations Interpretation 2 In these Regulations unless the context otherwise requires the Act eans the National Pension Schee (Occupational Pensions) Act 1998; annual inforation report eans the report referred to in regulation 8 and section 7(3) of the Act; auditor eans a person entitled to practise as a public accountant in Beruda; or 3

4 a person who has qualified as an accountant by exaination of one of the Institutes of Chartered Accountants of England and Wales, Ireland or Scotland, the Canadian Institute of Chartered Accountants or the Aerican Institute of Certified Public Accountants; average eployent incoe eans such incoe as ay, fro tie to tie be specified as such by the Departent of Statistics; collective agreeent has the eaning assigned to that expression by section 1 of the Trade Union Act 1965; interest or investent incoe eans the rate of return as can reasonably be attributed to the investent of the pension fund or that part of the pension fund to which the contributions relate; or such rate as ay otherwise be prescribed; pension coittee eans a coittee referred to in section 6 of the Act; prescribed retireent product eans a pension plan provided by a financial institution; or soe other body or person recognised by the Coission, which provides retireent benefits and which is approved by the Coission. PART II REGISTRATION AND ADMINISTRATION OF PENSION PLAN REGISTRATION Application for registration of pension plan 3 An application for registration of a pension plan shall be in For No. 1 in the First Schedule and shall be accopanied by certified copies of the docuents specified in paragraph 13 of that For. Application for registration of aendent of pension plan 4 (1) The adinistrator of a pension plan shall, by application in For No. 2 in the First Schedule, apply to the Coission within ninety days after the date on which the pension plan is aended, for registration of the aendent. (2) An application for registration of an aendent shall be ade by paying the prescribed fee to the Coission and subitting a certified copy of each aending docuent that changes the docuents that create and support the pension plan or pension fund; and such other inforation as the Coission ay require. 4

5 Proof of participation in financial institution pension plan 5 Proof of participation in a financial institution pension plan shall be in For No. 3 in the First Schedule. Issuance of notice of registration 6 The Coission shall issue a notice of registration to the eployer or, in the case of a financial institution pension plan, the financial institution, for each pension plan registered under the Act. Issuance of notice of registration of aendent 7 The Coission shall issue to the adinistrator a notice of registration for each aendent to a pension plan registered under this Act. Annual inforation report 8 The adinistrator of a pension plan shall, within six onths after the end of the fiscal year of a pension plan, subit to the Coission an annual inforation report in For No. 4 in the First Schedule. PENSION FUND REQUIREMENTS Financial stateents 9 (1) The adinistrator of a pension plan shall, within six onths after the end of the fiscal year of a pension fund, subit to the Coission financial stateents in respect of the pension fund. (2) If, at the end of the fiscal year of a pension plan the plan has $1,000,000 or ore in assets calculated at arket value, the adinistrator shall, within six onths thereafter, subit to the Coission an auditor s report respecting the financial stateents. (3) The financial stateents and the auditor s report, if any, shall be prepared in accordance with generally accepted accounting principles and generally accepted auditing standards, respectively. (4) The financial stateents shall be coprised of a stateent of net assets and a stateent of changes in net assets and shall be prepared on the accrual basis of accounting. (5) The financial stateents shall identify (c) the nae of the pension plan for which the stateents have been prepared; the registration nuber of the pension plan; and the fiscal period for which the financial stateents have been prepared. (6) The auditor shall report to the adinistrator when, in the course of reporting on the financial stateents, he becoes aware that there are circustances that indicate that there has or ay have been a contravention of the Act or regulations. 5

6 (7) The auditor shall report to the Coission any atter reported under paragraph (6) that has not been corrected or reported to the Coission by the adinistrator within thirty days after the auditor has reported such atter to the adinistrator. (8) A financial stateent subitted under this regulation shall be approved by the adinistrator and the approval shall be evidenced by the anual or facsiile signature of, (c) the adinistrator; where the adinistrator is a pension coittee or board of trustees, two ebers duly authorized to signify the approval; or where the adinistrator is a financial institution, an officer of the institution duly authorized to sign on behalf of the institution. Adinistrator to provide inforation to eligible persons, etc. 10 For the purposes of the inforation required to be provided by an adinistrator under section 13 of the Act, that inforation shall be provided (c) in the case of a person who is eligible to be a eber of a pension plan upon coenceent of eployent, within thirty days after the date of such coenceent, or, where prior notice of coenceent is not provided to the adinistrator, within thirty days after the adinistrator receives notice of such coenceent; in the case of a person who is a eber of a pension plan on the date that the plan is established within thirty days after the date of such establishent; and in the case of a person who at soe date in the future will becoe eligible to be a eber of a pension plan, within sixty days prior to such date, or, where prior notice of such eligibility is not provided to the adinistrator, within thirty days after the adinistrator receives notice of such eligibility. STATEMENTS TO MEMBERS Annual stateent to ebers of pension plan 11 (1) A stateent required under section 14 of the Act shall contain, at least, (c) (d) (e) the nae of the pension plan and its registration nuber; the eber s nae and date of birth; the period covered by the stateent; the date on which the eber joined the plan, and, except for ultieployer pension plans, the date on which the eber was eployed by the eployer; the date or dates on which the eber becae fully vested or will becoe fully vested; 6

7 (f) (g) (h) (i) (j) (k) (l) () (n) (o) the eber s noral retireent date and the earliest date at which the eber ay retire under the pension plan; where applicable, the earliest date the eber will be eligible to receive an unreduced pension; where applicable any person designated by the eber as a beneficiary for the purposes of the pre-retireent death benefit under section 31 of the Act; a description of any benefits provided on the death of a eber and the nae of any person designated as a beneficiary; the aount of required contributions, if any, ade to the pension fund by a eber during the period covered by the stateent; the accuulated aount of required contributions, if any, ade to the pension fund by the eber, including interest or investent incoe credited to such contributions, to the end of the period covered by the stateent; the aount of any additional voluntary contributions ade by the eber to the pension fund during the period covered by the stateent; the accuulated aount of any additional voluntary contributions ade by the eber to the pension fund, including interest or investent incoe credited to such contributions, to the end of the period covered by the stateent; in the case of a plan providing defined contributions benefits (i) (ii) (iii) (iv) the aount of eployer contributions allocated to the eber during the period covered by the stateent; the accuulated aount of eployer contributions, including interest or investent incoe credited to such contributions, allocated to the eber, to the end of the period covered by the stateent; the account balance at the end of the period covered by the stateent; and a suary of fees and expenses; in the case of a defined benefit plan (i) (ii) (iii) the eber s years of eployent for the purpose of the calculation of pension benefits, deterined as of the end of the period covered by the stateent; the annual aount of pension benefit payable at noral retireent date accrued at the end of the period covered by the stateent; and where salary is a factor in deterining a pension benefit, the salary level utilized for the purpose of deterining the benefit; 7

8 (p) (q) (r) (s) (t) where applicable, a stateent that special payents are being ade to liquidate any liability; a stateent setting out the treatent of any surplus in a continuing plan and on wind up; an explanation of any aendents affecting the eber ade to the pension plan during the period covered by the stateent for which an explanation has not been previously provided; a stateent that if, on the wind up of the plan, the assets of the plan are not sufficient to eet the liabilities of the plan, pension benefits ay be reduced; and inforation relating to actual or perceived conflicts of interest. (2) The adinistrator shall provide the stateent required under section 14 of the Act to ebers within six onths after the fiscal year end of the plan. Terination stateent - deferred pensions 12 (1) A written stateent required to be given under section 15 of the Act to a eber of a pension plan who terinates eployent or ceases to be a eber for reasons other than retireent or death and who is entitled to a deferred pension shall contain, as recorded on the records of the adinistrator, at least (c) (d) (e) (f) (g) (h) (i) (j) the nae of the pension plan and its registration nuber; the eber s nae and date of birth; the date on which the eber joined the pension plan and the years of eployent credited under the plan for the purpose of calculating the pension benefit; the eber s noral retireent date under the plan; the pension benefits and ancillary benefits to which the eber is entitled on terination and any options respecting such benefits, including early, noral and postponed dates for coenceent of the payent of benefits; where applicable, the nae of the person recorded as the eber s beneficiary; benefits provided on the death of a eber and the nae of any person appointed as beneficiary; any suppleental benefits payable for a teporary period of tie and the date on which the benefits cease to be so payable; any indexation provisions applicable to a deferred pension; any benefit payable in the event of the eber s death, should the death occur prior to the coenceent of payent of pension benefits; 8

9 (k) (l) () (n) (o) any benefit payable in the event of the eber s death, should the death occur after the coenceent of payent of pension benefits; the couted value of any deferred pension deterined in accordance with the regulations; any options with respect to transfers available under section 23 of the Act; the tie periods in which any option ust be exercised; and the aount of any refunds to which the eber is entitled and inforation on the effect, if any, the eber s election to receive a refund would have on the eber s pension or deferred pension. (2) The adinistrator shall provide the written stateent referred to in paragraph (1) within thirty days following the eber s terination of eployent or cessation of ebership in the plan or, where notice of terination or cessation is not provided to the adinistrator prior to the event, within thirty days after the adinistrator s receipt of such notice. Terination stateent - refunds 13 (1) A written stateent required to be given under section 15 of the Act to a eber of a pension plan who terinates eployent or ceases to be a eber of a pension plan for reasons other than retireent or death where the eber is not entitled to a pension or deferred pension shall contain at least (c) (d) (e) (f) (g) the nae of the plan and its registration nuber; the eber s nae and date of birth; the dates on which the eber joined the plan and ceased ebership in the plan; where applicable, the years of eployent credited under the plan for the deterination of pension benefits; the aount of any refund; any ancillary benefit to which the eber ay be entitled; and any option which the eber is entitled to elect and the tie period in which the option ust be exercised. (2) The adinistrator shall provide the stateent referred to in paragraph (1) within thirty days after the terination of eployent or cessation of ebership in the plan or, where notice of terination or cessation is not provided to the adinistrator prior to the event, within thirty days after the adinistrator s receipt of such notice. (3) Where no options are available to the eber with respect to a refund, the adinistrator shall provide any refund to which the eber is entitled within thirty days after the eber s terination of eployent or cessation of ebership in the plan or, where notice of terination or cessation is not provided to the adinistrator prior to the event, within thirty days after the adinistrator s receipt of such notice. 9

10 (4) Where the eber has an option with respect to a refund, the adinistrator shall coply with the election ade by the eber within sixty days after receipt of a direction fro the eber. Stateent to survivor 14 (1) The adinistrator shall, within thirty days after receipt of a notice of death of a eber or a forer eber who is not receiving payents fro the pension fund where the death results in the beneficiary or estate of the eber or forer eber becoing entitled to a benefit, provide the beneficiary or legal representative with a stateent required under section 15 of the Act that sets out at least (c) (d) (e) (f) the nae of the pension plan and its registration nuber; the aount and ethod of payent of the benefit; the aount, if any, payable under section 31(1) of the Act; where applicable, the basis for indexation of a pension; and where applicable, the aount of the pension resulting fro additional voluntary contributions; and the options available under section 31 of the Act. (2) For purposes of section 31(1) of the Act, a beneficiary shall ake an election, in writing, within ninety days after receipt of the stateent referred to in paragraph (1) and in default of such election the adinistrator shall forthwith pay the lup su referred to in section 31(1) of the Act; and upon such payent the adinistrator shall be discharged fro any further obligation. (3) The adinistrator of the plan shall coply with an election under paragraph (2) within thirty days after receipt of the written election fro the beneficiary. (4) The adinistrator of the plan shall provide payent of the death benefit to the beneficiary, if any, or the estate, within thirty days of receipt of such inforation as in the opinion of the adinistrator, is sufficient to justify payent of the benefit. Stateent on retireent 15 (1) Within thirty days after the date on which an adinistrator receives notification that a eber has retired, or, where the adinistrator has not received such notification, within thirty days after an adinistrator receives a copleted application for the payent of pension benefits, the adinistrator shall give the eber a written stateent that sets out, in accordance with section 15 of the Act, (c) the nae of the pension plan and its registration nuber; the eber s nae and date of birth; where applicable, the date on which the eber joined the plan and the years of eployent credited under the plan for purposes of calculating the pension benefit; 10

11 (d) (e) (f) (g) (h) (i) (j) (k) (l) () where applicable, the nae of the person recorded as the eber s beneficiary; the date pension benefit payents coence; the aount of the pension to which the eber is or will be entitled according to the records of the adinistrator and based on elections ade by the eber; any increase or reduction in the pension resulting fro early or postponed retireent; the aount of the pension benefit purchased with additional voluntary contributions ade by the eber; the aount of the pension benefit purchased with contributions resulting fro a transfer ade on behalf of the eber fro another pension fund; any bridging benefits or special allowances and the date on which such ancillary benefits cease to be paid; any indexation provisions applicable to the pension or deferred pension; any benefit payable in the event of the eber s death and the nae of the person approved as the beneficiary of that benefit; and any other refunds under the plan to which the eber is entitled. (2) In this regulation bridging benefit eans a periodic payent provided under a pension plan to a forer eber of the pension plan for a teporary period of tie after retireent for the purpose of suppleenting the forer eber s pension benefit. INFORMATION AVAILABLE ON REQUEST Inforation available on request 16 (1) Subject to paragraph (2), for the purposes of section 16(2) of the Act, the docuents which a person entioned in subsection (1) of that section is entitled to inspect are (c) (d) (e) the provisions of the current pension plan including any aendents to the plan; any docuents that relate to the pension plan that are required to be subitted to the Coission; the provisions of any previous pension plan including aendents thereto where the current plan is a successor to a previous pension plan; any docuents that relate to a previous version of the pension plan and that are required to be subitted to the Coission; the applicable provisions of any docuent that sets out the eployer s responsibilities with respect to the pension plan; 11

12 (f) (g) (h) a docuent that delegates the adinistration of the pension plan or pension fund; copies of any financial stateent or any report that is subitted to the Coission in respect of the pension plan or pension fund; and copies of those parts of an agreeent that concern the purchase or sale of a business or the assets of a business and that relate to the pension plan. (2) Nothing contained in paragraph (1) authorizes a person to inspect any part of a pension plan, or other docuent or inforation, unless such part or docuent or inforation, as the case ay be, is specifically applicable to that person; and that paragraph shall be read and construed accordingly. PART III WINDING UP Notice of proposal to wind up 17 (1) A notice of proposal to wind up a pension plan required under section 38(2) of the Act shall include (c) the nae of the pension plan and its registration nuber; the proposed date of winding up; and a stateent that each eber, forer eber or any other person entitled to a pension, deferred pension, any other benefit or a refund will be provided with an individual stateent setting out entitleents and options under the plan. (2) In addition to entitleents under the plan and any options available, a stateent provided to each eber, forer eber or any other person under section 42 of the Act shall include (c) (d) (e) (f) the nae of the pension plan and its registration nuber; the eber s nae and date of birth; the date of winding up of the plan; the date on which the eber joined the plan, and, except in the case of ulti-eployer pension plans, the date the eber was eployed by the eployer; the eber s beneficiary as indicated on the records of the adinistrator; the aount of required contributions ade to the pension fund by a eber since the date of the last annual stateent provided under section 14 of the Act; 12

13 (g) (h) (i) (j) (k) (l) () (n) (o) (p) the accuulated aount of required contributions ade to the pension fund by the eber, including interest or investent incoe credited to such contributions, to the date of the winding up of the plan; the aount of additional voluntary contributions ade by the eber to the pension fund since the date of the last annual stateent provided under section 14 of the Act; the accuulated aount of additional voluntary contributions ade by the eber to the pension fund, including interest or investent incoe credited to such contributions, to the date of winding up; any aount transferred into the pension plan since the date of the last annual stateent provided under section 14 of the Act fro another pension plan on behalf of the eber and the pension benefit under the plan attributable to that aount; in the case of a plan providing defined contribution benefits (i) (ii) (iii) (iv) the aount of eployer contributions required to be ade in respect of the eber since the date of the last annual stateent provided under section 14 of the Act; the aount of eployer contributions allocated to the eber since the date of the last annual stateent provided under section 14 of the Act; the accuulated aount of eployer contributions, including interest or investent incoe credited to such contributions, allocated to the eber on the records of the plan, to the date of winding up; and the account balance to the date of winding up; in the case of a defined benefit plan (i) (ii) the eber s years of eployent for the purpose of the calculation of pension benefits; and where salary is a factor in deterining a pension benefit, the salary level utilized for the purpose of deterining the benefit; the interest or investent incoe credited to contributions required to be ade by the eber since the date of the last annual stateent required under section 14 of the Act; an explanation of any aendents affecting the eber ade to the pension plan during the period covered by the stateent for which an explanation has not previously been provided; the tie period in which any option ust be exercised; if there are insufficient assets to pay all pension benefits, a description of any reductions ade to the person s benefits and the aount of contributions the eployer is liable to pay into the fund; 13

14 (q) (r) (s) (t) if there are surplus assets, a stateent of the ethod of distribution and, if applicable, the forula for allocation of any surplus aong the plan beneficiaries; notice of where copies of the winding up report are available and inforation on how copies of the report ay be obtained; notice of the person the recipient of the stateent ay contact with respect to any questions arising out of the stateent; and notice that the entitleents and options are subject to the approval of the Coission and ay be adjusted accordingly. (3) A recipient of a stateent referred to in paragraph (2) who is entitled to elect an option shall forward the election to the adinistrator within ninety days after receipt of the stateent. (4) The adinistrator shall coply with an election ade by a person on the winding up of a pension plan within thirty days after whichever is the later. the receipt of the election; or the receipt of notice that the winding up report has been approved by the Coission, Insufficiency after winding up 18 Where a pension plan has been wound up in whole or in part and the assets of the pension plan are not sufficient to pay pension or other benefits pension benefits to which a person ay be entitled but which have not vested under the ters of the pension plan shall be reduced to an aount proportionate to the extent that the benefits had been funded; and except as provided in paragraph, pension or other benefits to which a person would otherwise be entitled, shall be reduced to an aount proportionate to the extent that the benefits had been funded. Fees 19 (1) The fees specified in the second colun of the Second Schedule shall be payable in respect of the atters specified in the first colun of that Schedule. (2) The Minister ay fro tie to tie by order subject to affirative resolution procedure aend the Second Schedule. 14

15 Interpretation 20 In this Part PART IV SELF-EMPLOYMENT PENSION PLANS net earnings eans a self-eployed person s revenues less expenses (excluding any wages, salary, leave pay, fee, coission, bonus or payents fro a profit sharing schee paid to a self-eployed person), fro operating a business in a calendar year; pensionable earnings fro self-eployent in a calendar year eans net earnings fro a business, provided that such net earnings are calculated on a consistent basis fro year to year using either a cash ethod or accrual ethod of accounting; self-eployent pension plan eans a pension plan organized and adinistered to provide pension benefits in respect of the self-eployent of a self-eployed person. [Regulation 20 inserted by BR 69/2000 effective 20 Septeber 2000] Self-eployed person to register self-eployent pension plan 21 A self-eployed person who has attained twenty-three, but has not attained sixtysix, years of age and who in a calendar year has pensionable earnings fro self-eployent exceeding $20,000 shall apply for registration of a self-eployent pension plan in accordance with Part II of the Act. [Regulation 21 inserted by BR 69/2000 effective 20 Septeber 2000] Aount of contribution to self-eployent pension plan 22 (1) A self-eployed person referred to in regulation 21 shall within sixty days after the end of, and in respect of that calendar year, contribute to a registered self-eployent pension plan an aount which, subject to paragraphs (2) and (3), is the equivalent of two ties the aount of the contribution rate at the dates specified in the First Schedule to the Act and thereafter, such aount as ay be prescribed by regulations. (2) A self-eployed person referred to in paragraph (1) shall not, in any one calendar year, be required to contribute an aount which exceeds $5,000. (3) A self-eployed person referred to in paragraph (1) ay elect to contribute onthly to a registered self-eployent pension plan and, where he so elects, the aount of such onthly contribution shall be calculated on the basis of a reasonable estiate of the self-eployed person s onthly earnings. (4) Where in a calendar year the aount contributed by a self-eployed person under paragraph (3) exceeds the aount which that person, but for that paragraph, would have contributed under paragraph (1) the excess ay, at the election of the self-eployed 15

16 person be carried forward and applied in respect of contributions for a subsequent year, or be treated as additional voluntary contribution. [Regulation 22 inserted by BR 69/2000 effective 20 Septeber 2000] Non-application of regulation 21 to certain self-eployed persons 23 (1) The requireent for registration of a self-eployent pension plan under regulation 21 does not apply to a self-eployed person who participates in a financial institution pension plan; or a registered pension plan established or aintained (i) (ii) for eployees of the self-eployed person; or for eployees of a business carried on by the self-eployed person. (2) A self-eployed person who participates in a financial institution pension plan or a registered pension plan established or aintained for eployees of the self-eployed person or for eployees of the business carried on by the self-eployed person shall contribute thereto for the benefit of the self-eployed person at a rate of not less than the rate set out in regulation 22. [Regulation 23 inserted by BR 69/2000 effective 20 Septeber 2000] Application of Act and Regulations to self-eployed persons 24 Except as provided in this Part, the provisions of the Act, other than section 17, and regulations applicable to pension plans, eployers and ebers shall apply with any necessary changes to self-eployent pension plans and to self-eployed persons as though they were eployers and ebers. [Regulation 24 inserted by BR 69/2000 effective 20 Septeber 2000] Interpretation 25 In this regulation PART V PENSION FUND INVESTMENTS arket value eans the ost probable price that would be obtained for property in an ar s length sale in an open arket under conditions requisite to a fair sale, the buyer and seller acting prudently, knowledgeably and willingly; utual fund eans a copany liited by shares, or other copany having a share capital and incorporated for the purpose of investing the oneys of its ebers for their utual benefit and having the power to redee or purchase for cancellation its shares without reducing its authorized share capital and stating in its eorandu that it is a utual fund; 16

17 traded publicly eans listed or quoted on the Beruda Stock Exchange or any other arket on which securities are listed or quoted if the prices at which they have been traded or quoted on that arket are regularly published in a newspaper, or business or financial publication, which is of general circulation and for which regular payent is required; unit trust schee eans any arrangeents ade for the purpose, or having the effect, of providing, for persons having funds available for investent, facilities for the participation by the as beneficiaries under a trust, in profits or incoe arising fro the acquisition, holding, anageent or disposal of any property whatsoever; security eans any docuent, instruent or writing coonly known as a security and includes (c) a share of any class, a series of shares or a debt obligation of a copany; a certificate evidencing such share or debt obligation; and a warrant; voting share eans a share of any class of shares of a copany that carries voting rights under all circustances; and a share of any class of shares of a copany that carries voting rights by reason of the occurrence of any contingency where that contingency has occurred and is continuing; and warrant eans any warrant or other instruent entitling an investor to subscribe for any of the following investents shares; debentures. [Regulation 25 inserted by BR70/2000 effective 20 Septeber 2000] Duties of adinistrator 26 (1) The adinistrator shall, subject to paragraph (2), giving consideration to the overall context of the investent portfolio, ensure that the selection of investents is such as to avoid undue risk of loss or ipairent; and create a reasonable expectation of fair return or appreciation. (2) Paragraph (1) shall not apply to that part of a pension fund in which a eber of a pension plan akes his own decisions regarding the selection of investents. (3) Where it is reasonable and prudent in the circustances so to do, the adinistrator of a pension plan ay eploy one or ore agents to carry out any act 17

18 required to be done in the adinistration of the pension plan and in the adinistration and investent of the pension fund. (4) An adinistrator of a pension plan who eploys an agent shall personally select the agent and be satisfied as to the agent s suitability to perfor the act for which the agent is eployed, and the adinistrator shall carry out such supervision of the agent as is prudent and reasonable. (5) An eployee or agent of an adinistrator is also subject to the standards that apply to the adinistrator under section 7(2) of the Act. (6) The adinistrator of a pension plan is not entitled to any benefit fro the pension plan other than pension benefits, ancillary benefits, a refund of contributions and fees and expenses related to the adinistration of the pension plan or otherwise peritted under a law in force in Beruda or provided for in the pension plan. (7) Paragraph (6) applies with necessary odifications to a eber of a coittee or board of trustees that is the adinistrator of a pension plan and to a person or group of persons or an entity which by virtue of this Act or any other law is vested with responsibility for the adinistration of a pension plan or pension fund. (8) An agent of the adinistrator of a pension plan is not entitled to payent fro the pension fund other than the usual and reasonable fees and expenses for the services provided by the agent in respect of the pension plan. [Regulation 26 inserted by BR70/2000 effective 20 Septeber 2000] Investent policies and goals 27 (1) The adinistrator of a pension plan shall, subject to paragraph (4), establish and aintain a written stateent of investent policies and goals. (2) The stateent of investent policies and goals shall be reviewed by the adinistrator annually and shall be confired or aended by hi. (3) The stateent of investent policies and goals referred to in paragraph (1) shall identify the type of pension plan, the nature of the liabilities of the pension plan and shall contain guidelines that at least set out (c) (d) (e) (f) the investent portfolio diversification including the aggregate and individual investent liits; the asset ix policy and rate of return expectations; the categories and sub-categories of investents that ay be ade; the policy to be followed where there is an actual or perceived conflict of interest on the part of the adinistrator, a eber of a coittee or board of trustees or any eployee or agent of the adinistrator; iniu disclosure requireents with respect to an actual or perceived conflict of interest including the tiing of the disclosure; the lending of cash or securities; 18

19 the retention or delegation of voting rights acquired through pension plan investents; and the basis for the valuation of investents that are not regularly traded. (4) Regulation 27 shall not apply where a eber of a pension plan akes his own decisions regarding the selection of investents. [Regulation 27 inserted by BR70/2000 effective 20 Septeber 2000] Defined contribution pension plan 28 The adinistrator of a defined contribution pension plan shall ensure that a reasonable range of investents is offered and that a eber is given enough relevant inforation to allow the eber to ake an infored decision regarding his investent in the plan. [Regulation 28 inserted by BR70/2000 effective 20 Septeber 2000] Requireents for pension fund investent 29 (1) Subject to paragraph (3), the adinistrator of a pension plan shall ensure that all bank certificates or deposits in which the pension fund has invested do not exceed one percent of the issuing bank s or deposit copany s total shareholder equity; or five percent of the issuing bank s shareholder equity if the bank is a licensed bank or licensed deposit copany in Beruda and if the approval in writing of the Coission has previously been obtained; that guaranteed investent certificates in which the pension fund ay invest are issued by an insurance copany or copanies rated by an internationally recognized credit rating agency at grade A or higher. (2) The percentage of the total arket value of a pension fund that ay be invested in the securities of any single copany, person, association or other entity shall not exceed ten percent of the total arket value of the pension fund at the tie the investent is ade. (3) (g) (h) Paragraph (2) does not apply to (c) (d) (i) (ii) deposits held with a licensed bank or licensed deposit copany in Beruda; governent issues, bonds, or debentures, that are rated A or higher by Moody s or Standard & Poor s rating agencies; an insurance contract approved by the Coission; or investents in open-ended utual funds or units in a unit trust. 19

20 (4) In deterining the percentage of shareholder equity under paragraph (1), the ost recently published balance sheet shall be used. [Regulation 29 inserted by BR70/2000 effective 20 Septeber 2000] Mortgages, etc. 30 The funds of a pension plan shall not be loaned on the security of a ortgage or other security agreeent on real estate or leaseholds where the aount paid for the ortgage or agreeent, together with any prior or equal ranking indebtedness, exceeds sixty percent of the arket value of the real estate at the tie the loans were approved. [Regulation 30 inserted by BR70/2000 effective 20 Septeber 2000] Assets of pension fund 31 Unless otherwise peritted by these Regulations, a pension plan shall not pledge or ortgage the assets of the pension fund. [Regulation 31 inserted by BR70/2000 effective 20 Septeber 2000] Borrowing 32 An adinistrator of a pension plan shall not borrow on behalf of the pension fund without the prior approval of the Coission. [Regulation 32 inserted by BR70/2000 effective 20 Septeber 2000] Investent in real estate 33 Investent by a pension fund in real estate shall at the tie the investent is ade be liited to a axiu of five percent of the total arket value of the pension fund s assets directly in any single parcel of real estate. [Regulation 33 inserted by BR70/2000 effective 20 Septeber 2000] Conflict of interest 34 An adinistrator or, if the adinistrator is a coittee or a board of trustees, a eber of the coittee or board that is the adinistrator of a pension plan, shall not knowingly perit the adinistrator s interest to conflict with the adinistrator s duties and powers in respect of the pension fund. [Regulation 34 inserted by BR70/2000 effective 20 Septeber 2000] Prohibited investents 35 (1) The assets of a pension fund shall not be loaned to or, except where securities are traded publicly, invested in the securities of, the adinistrator, or an officer, director, agent or eployee of the adinistrator; a person responsible for holding or investing the assets of the pension fund or any officer or eployee of that person; 20

21 (c) (d) (e) (f) (g) a trade union representing ebers of the pension plan or an officer or eployee of that trade union; an eployer and, where the eployer is a copany, officers, or directors of the copany; where the eployer is a copany any shareholder who owns directly or indirectly ore than ten percent of the voting shares of the copany; or an affiliated copany; the spouse or child of any person referred to in paragraphs to (e); and operations wholly-owned or controlled either directly or indirectly by a person referred to in paragraphs to (f). (2) The assets of a pension fund shall not be loaned, or otherwise used, in any securities lending schees or arrangeents except where the loans, or other use, are secured by cash or readily arketable investents having a arket value of at least 105 percent of the loan, or other use, and aintained on a daily ark-to- arket basis to ensure a arket value of the collateral of at least 105 percent of the outstanding arket value of the assets. (3) For the purpose of this regulation, one copany is affiliated with another copany only if one of the is the subsidiary of the other or both are subsidiaries of the sae copany or each of the is controlled by the sae person (4) For the purposes of this regulation, a copany is a subsidiary of another copany only if (i) (ii) it is controlled by (i) (ii) (iii) that other copany; or that other copany and one or ore copanies each of which is controlled by that other copany; or two or ore copanies each of which is controlled by that other copany; or it is a subsidiary of a subsidiary of that other copany. (5) For the purposes of this regulation, a copany is controlled by another copany or person or by two or ore copanies only if shares of the first-entioned copany carrying ore than fifty per cent of the votes for the election of directors are held, otherwise than by way of security only, by or for the benefit of that other copany or persons or by or for the benefit of those other copanies; and the votes carried by such shares are sufficient, if exercised, to elect a ajority of the board of directors of the first-entioned copany. 21

22 (6) this regulation does not apply to deposits or guaranteed investent certificates. [Regulation 35 inserted by BR70/2000 effective 20 Septeber 2000] Assets, etc. to be in nae of pension fund 36 All assets of a pension fund shall be held in the nae of, or for the account of, the fund. [Regulation 36 inserted by BR70/2000 effective 20 Septeber 2000] Acceptance of bonds, etc. by pension fund 37 Where a pension fund owns investents in a copany and, as a result of arrangeents for the reorganisation or liquidation of the copany, or for the aalgaation of the copany with another copany, the investents are to be exchanged for bonds, debentures or other evidences of indebtedness, or shares that result in the liitations set out in this Part being exceeded, the pension fund ay accept and hold such bonds, debentures or other evidence of indebtedness or shares for a period not exceeding one year unless approved by the Coission. [Regulation 37 inserted by BR70/2000 effective 20 Septeber 2000] Transitional 38 A pension plan that was established, and was in effect before 1 July 2000 shall coply with this Part by 1 Septeber [Regulation 38 inserted by BR70/2000 effective 20 Septeber 2000] Interpretation 39 (1) In this Part PART VI ACTUARIAL AND FUND MANAGEMENT A - INTERPRETATION actuarial gain eans the su, if positive, at the valuation date of a going concern valuation, of the gain or loss to a pension plan during the period since the iediately preceding report prepared in accordance with regulation 50(1) or 51(1) of the increase or decrease in the value of the assets of a pension plan, less the liabilities of the plan during the period deterined in a going concern valuation of the plan resulting fro the difference between actual experience and the experience expected by the actuarial assuptions on which that valuation was based; the aount by which the going concern liabilities increase or decrease as a result of an aendent to the plan other than an aendent that 22

23 (c) provides benefits for eployent prior to the date of the aendent where the eployent had not previously been recognised for purposes of the provision of pension benefits; and the aount by which the going concern liabilities increase or decrease or the going concern assets increase or decrease as a result of a change in actuarial ethods or assuptions upon which the current going concern valuation is based; actuarial loss eans the su, if negative, at the valuation date of a going concern valuation, of (c) the gain or loss to a pension plan during the period since the iediately preceding report prepared in accordance with regulation 50(1) or 51(1) of the increase or decrease in the value of the assets of a pension plan less the liabilities of the plan during the period deterined in a going concern valuation of the plan resulting fro the difference between actual experience and the experience expected by the actuarial assuptions on which that valuation was based; the aount by which the going concern liabilities increase or decrease as a result of an aendent to the plan other than an aendent that provides benefits for eployent prior to the date of the aendent where the eployent had not previously been recognised for purposes of the provision of pension benefits; and the aount by which the going concern liabilities increase or decrease or the going concern assets increase or decrease as a result of a change in actuarial ethods or assuptions upon which the current going concern valuation is based; ancillary benefits eans the benefits referred to in section 29 of the Act; annuity contract eans an annuity contract, issued by an issuer registered under the Insurance Act 1978 or any other person approved by the Coission, which is purchased in discharge or in full settleent of a pension or benefit under a registered pension plan; asset transfer ratio eans the ratio of the arket value of investents held by the eployer s pension plan plus any cash balances and accrued or receivable incoe ites; to the su of the transfer liabilities and the residual liabilities; asset transfer value eans the transfer liabilities ultiplied by the lesser of the asset transfer ratio; and 1.00; book value, in relation to an asset, eans the cost of acquisition to the person acquiring the asset, including all direct ancillary costs associated with the acquisition; 23

24 carrying value eans a reasonable estiate of arket value; effective date of transfer eans the effective date of the aendent which gives rise to the transfer of assets and liabilities fro an exporting plan to an iporting plan; escalated adjustent eans an adjustent that is ade to a pension or a deferred pension of a forer eber of a pension plan where the adjustent is not capable of being deterined with certainty at the tie the plan or a relevant aendent to the plan is subitted for registration because the adjustent is related to the investent earnings of the pension fund or to future changes in a general wage or price index; or the adjustent is an increase in the pension or deferred pension at a fixed annual percentage rate specified in the plan; exporting plan eans each pension plan fro which an asset and liability transfer to an iporting plan is proposed; going concern assets eans the value of the assets of a pension plan including accrued and receivable incoe deterined on the basis of a going concern valuation; going concern liabilities eans the present value of the accrued benefits of a defined benefit provision of a pension plan deterined on the basis of a going concern valuation; going concern unfunded liability eans the aount, if any, by which the su of the going concern liabilities exceeds the going concern assets; going concern valuation eans a valuation of assets and liabilities of a defined benefit provision of a pension plan using ethods and actuarial assuptions considered by the actuary who valued the plan to be in accordance with the Standards of Practice of the Canadian Institute of Actuaries, or a corresponding British or Aerican equivalent that ay be approved by the coission, for the valuation of a continuing pension plan; iporting plan eans the pension plan to which the assets and liabilities will be transferred; initial valuation date eans the valuation date of the first report filed or subitted following the coing into operation of these regulations; arket value eans the ost probable price that would be obtained for property in an ar s length sale in an open arket under conditions requisite to a fair sale, the buyer and seller acting prudently, knowledgeably and willingly; noral cost eans the cost of pension benefits and ancillary benefits with respect to a fiscal year of a pension plan deterined in accordance with the ethods and actuarial assuptions used in a going concern valuation; 24

25 past service unfunded liability eans the aount of going concern unfunded liability that results fro the provision of benefits with respect to eployent prior to the effective date of the pension plan or fro an aendent to a plan that provides benefits for eployent prior to the date of the aendent where the eployent had not previously been recognised for purposes of the provision of pension benefits; prospective benefit increase eans an increase to a pension benefit or ancillary benefit set out in the pension plan or agreed to by the parties to a collective agreeent, but not yet in effect; report unless otherwise specified eans a report prepared by an actuary; residual asset value eans the residual liabilities ultiplied by the lesser of the asset transfer ratio; and 1.00; residual liabilities are the greater of the going concern liabilities; and the solvency liabilities; of the pensions, deferred pensions, ancillary benefits or pension benefits for which the eployer has retained responsibility; solvency assets eans the arket value of investents held by a pension plan plus any cash balances of the plan and accrued or receivable incoe ites of the plan, excluding the value of any qualifying annuity contract of the plan; solvency deficiency, eans the aount by which the su of the solvency liabilities exceeds the su of the solvency assets, as of the valuation date of a report; solvency excess eans the aount by which the su of the solvency assets exceed the su of the solvency liabilities as of the valuation date of a report; solvency liabilities, in relation to a report, eans the liabilities of a pension plan deterined as if the plan had been wound up on the valuation date of the report, but excluding liabilities for (c) any escalated adjustent; prospective benefit increases; and future salary increases; solvency valuation eans a valuation perfored in accordance with regulation 51(3); special payent eans a payent or one of a series of payents deterined for the purpose of liquidating a going concern unfunded liability or solvency deficiency in accordance with regulations 40(1) and 40(2); 25