Instruction Guide: Annual Information Return

Transcription

1 Instruction Guide: Annual Information Return A guide to assist pension plan administrators in completing an Annual Information Return. fcaa.gov.sk.ca

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3 Instruction Guide Annual Information Return Introduction Pursuant to The Pension Benefits Act, 1992 (the Act), a pension plan administrator (Administrator) of a pension plan (plan) registered under the Act must file an Annual Information Return (AIR) with the Superintendent of Pensions (Superintendent). The AIR is also used to meet the annual reporting requirements of the Canada Revenue Agency (CRA) for registered pension plans. The AIR must be completed and filed with the Superintendent within 180 days of the end of each fiscal year of the plan, or within 60 days of the termination of a plan. If the AIR is filed late, filed incorrectly, or if it is not filed at all, the CRA can impose financial penalties under the Income Tax Act (Canada) (ITA) and may give notice of intent to revoke the registration of the plan. Filing Fee Calculation Section 5 of The Pension Benefits Regulations, 1993 (the Regulations) outlines the fees payable when filing the AIR. Fees are $7.00 for each active plan member and $3.50 for each person who is a former member. Filing fees are subject to a minimum fee of $150 and a maximum fee of $15,000. Please make the cheque payable to the Minister of Finance. Please ensure that a remittance equal to the amount calculated in section 11 of the AIR is submitted with the filed AIR. The AIR may be considered incomplete until the appropriate filing fee is submitted. The filing fee is GST exempt. Definitions (Please refer to section 2 of the Act for the precise definitions of these terms) A member is an employee who has made contributions to the plan, or on whose behalf an employer was required by the plan to make contributions to it, and who has not terminated his or her membership in the plan or commenced his or her pension. Note that in the case of a specified multi-employer plan, an active member would include a former employee who is no longer making contributions to the plan, or on whose behalf an employer is no longer making contributions to the plan, but who has not yet terminated his or her membership in the plan, or commenced his or her pension. A former member is a former employee whose membership in a plan has terminated as a result of termination of or retirement from, employment and has funds remaining in the plan. A former member also includes pensioners and beneficiaries receiving a benefit from the plan and deferred members who have a deferred pension entitlement remaining under the plan. Page 1

4 Explanation of Sections found in the AIR This explanation is broken down by the sections of the AIR and includes bullet point tips and directions for how to complete the applicable section. 1 Plan Identification Identify the plan registration number, as assigned by FCAA and CRA. Identify the plan name, as defined in the plan documents. The AIR should cover a twelve-month period, ending on the plan's fiscal year-end as defined in the plan documents, unless the plan has terminated during the plan s fiscal year. 2 Plan Administrator Name of the Administrator, as defined in the plan documents. Including the primary person who is the contact of the Administrator. 3 Plan Sponsor Name and contact information of the principal employer, organization or association that is sponsoring the pension plan (Sponsor), as defined in the plan documents. 4 Fund Holder Name and contact information of the plan s fund holder. The pension fund of a plan must be held by an insurance company pursuant to a contract for insurance; a trust pursuant to which the trustee is a trust corporation that is licensed to carry on business in Canada; a trust pursuant to which the trustees are three or more individuals at least three of whom reside in Canada and at least one of whom is not a significant shareholder, partner, or employee of the employer or a proprietor of the business of the employer; a society established pursuant to the Pension Fund Societies Act (Canada); a body corporate that is permitted to act as a fund holder pursuant to the ITA; or a combination of the persons or entities mentioned above. Complete Schedule 1 if the fund holder is a trust pursuant to which the trustees are three or more individuals. If there is more than one fund holder, please provide full details on a separate attachment. 5 Additional Information The plan documents should clearly identify the most current listing of participating employers. Any changes to the listing of participating employers must be done via an amendment to the plan text. In some cases, where a participating employer ceases to participate in the plan, a partial termination of the plan may have occurred. Indicate how many participating employers are in the plan. The Superintendent may request a listing of those participating employers, including contact information to supplement the filed AIR. Identify whether the Sponsor or any participating employer has filed for bankruptcy or been placed under the protection of the Companies Creditors Arrangement Act (Canada) or the Bankruptcy and Insolvency Act (Canada). Provide a listing of the participating employers that have filed for bankruptcy or been placed under bankruptcy protection. Identify whether the plan is a designated plan within the meaning of the ITA. Pursuant to the ITA, an active member is an employee who accrues benefits under defined benefit (DB) provisions, or who makes contributions or on whose behalf the employer makes contributions to a money purchase plan. According to the Income Tax Regulations (Canada) (ITR), a connected person is generally one who (for a complete definition, please see subsection 8500(3) of the ITR): owns, directly or indirectly, 10% or more of the issued shares of any class of the capital stock of the employer or a related corporation; does not deal at arm s length with the employer; or is a specified shareholder of the employer by reason of ss. 248(1) of the ITA. Page 2

5 Explanation of Sections found on the AIR (continued) 5 Additional Information (continued) DB Only - Identify any regular or ad hoc inflation increases or other increases given to pensioners and other beneficiaries who are in receipt of a pension from the plan. Also report the basis used to calculate the increase (i.e. based on full Canadian consumer price index, percentage amount based on excess interest earnings, etc.). DB Only - Provide the requested confirmation regarding surplus utilization. 6 Administration Identify whether the Administrator has systems in place to determine which law applies to the benefits of former members, including pensioners and other beneficiaries. If this plan is not a multijurisdictional pension plan, please select N/A. Identify whether the plan records are stored by the Administrator or, if not, provide the location of the books. Identify any amendments that have been made to the plan. For a pension plan which is not a plan where members and former members make their own investment choices, the Administrator must establish a written statement of investment policies and procedures (SIP&P) in respect of the plan's portfolio of investments and loans. The Administrator must ensure that the plan's SIP&P was written with regard to all factors that may reflect on the funding and solvency of the plan and the ability of the plan to meet its financial obligations. The Administrator must conduct a review, and confirm or amend, the SIP&P at least once each plan year. Please report if this review was done. 7 Canada Revenue Agency Information Pursuant to the ITR, a specified multi-employer plan (SMEP) (for a complete definition of a SMEP, see section 8510 of the ITR) has the following characteristics: the plan is a MEP (see definition below); employers participate in the plan under a collective bargaining agreement and contributions are according to a negotiated formula; employer contributions are based on hours worked by employees or some other similar measure; all or nearly all (90% is acceptable) of the employers are taxable entities; it is expected that at least 15 non-related employers will contribute to the plan in the year, or at least 10% of the active members of the plan will be employed in the year by more than one participating employer; the plan administrator applied and was granted designation as a SMEP under paragraph 8510(2)(b) of the ITR. Pursuant to the ITA, a multi-employer plan (MEP) is a plan for which, at the beginning of the year, it is reasonable to expect that at no time in the year will more than 95% of the active plan members be employed by a single employer or by a related group of participating employers. For a complete definition of a MEP, please refer to section 8500(1) of the ITR. 8 Contributions The contributions reported in this section should be those related to the plan s fiscal year covered by the AIR, whether actually paid within that year or within such other period allowed by the Act. Complete the chart. Calculate all sums as required. Enter the total amount of contributions made to the plan from the employer or employers, even if surplus assets or unvested forfeitures were used to provide those contributions, in whole or in part. Do not include special payments made to amortize unfunded liabilities or solvency deficiencies in this section. Page 3

6 Explanation of Sections found on the AIR (continued) 8 Contributions (continued) DB Only Surplus Used = Enter the amount, if applicable, of any surplus assets used to reduce the required employer contributions. In the event that the plan documents provide for it, please attach an explanation of how surplus assets were used to reduce both the required member and required employer contributions. Defined Contribution (DC) Only Forfeitures Used = Enter the amount, if applicable, of any unvested forfeitures used to reduce the required employer contributions. If a DC provision of a plan so permits, credits resulting from unvested forfeitures can be used to reduce the employer contributions. "Unvested forfeitures" are required employer contributions, and the interest accrued on those contributions, which were made on behalf of a former employee and to which the former employee has no entitlement on termination of membership. DB Only Special Payments = Special payments apply to plans that have DB provisions. They do not apply to DC provisions. Each unfunded liability or solvency deficiency must be identified separately and not combined with any other unfunded liability or solvency deficiency. Contributions and special payments made in the plan s fiscal year covered by the AIR should equal the amounts required by the recommendations provided in the most recently filed cost certificate or actuarial valuation report. Please provide an explanation if this is not the case with this AIR. 9 Pension Fund Line (a) = Enter the market value of assets at the beginning of the plan s fiscal year. Note: public sector plans may provide the book value when the market value is unavailable. Line (b) = Enter the sum of the contributions and special payments reported in Box 8.1, 8.2 and 8.3. Line (c) = Enter the total amounts transferred into the pension fund from other registered pension plans (RPPs), pooled registered pension plans (PRPPs), deferred profit sharing plans (DPSPs), registered retirement savings plans (RRSPs), and registered retirement income funds (RRIFs). Line (d) = Enter the total amount of benefits paid to beneficiaries (i.e. death benefits, unvested benefits, unlocked benefits). Line (e) = Enter the total amount of all transfers to other plans including RPPs, PRPPs, RRSPs, lockedin retirement accounts (LIRAs), life income funds (LIFs), locked-in retirement income funds (LRIFs) and RRIFs. Line (f) = Enter the net investment earnings or losses Line (g) = Enter the administrative expenses. Do not include investment expenses (i.e. brokerage, investment management or custodial fees) or administrative expenses paid directly by an employer or employers. Administrative expenses are generally related to: the collection of contributions, the calculation and payment of benefits, the general administration of the plan including expenses related to providing information to members, and the purchase of office supplies and computer equipment. Line (h) = Enter the market value of assets at the end of the plan s fiscal year. Note: public sector plans may provide the book value when the market value is unavailable. Line (i) and (j) = DB Only = Enter the total actuarial liability based on a funding method that matches contributions with accrued benefits on a reasonable basis. Enter the date of the last calculation of actuarial liability for plan obligations. Page 4

7 Explanation of Sections found on the AIR (continued) 10 Membership Complete the chart. Calculate all sums as required. The chart is designed to capture any members who fall under the definition of Included Employment (IE). If the plan has any members working in Included Employment, please report the total number by province in the appropriate columns. "Included Employment" is employment in connection with the operation of any work, undertaking or business that is subject to the authority of federal legislation. Employment in air, water, railway transport; atomic energy; chartered banks; the territories; certain First Nation organizations; flour, feed or seed mills; inter-provincial trucking; or radio, television or telegraph businesses/activities falls into the category of included employment. If the plan terminated in the reporting period covered by the AIR, report the number of active members and former members that were affected on the date of plan termination. For plans with both DB and DC provisions, please report the active member and former member values for the entire plan, including both provisions. If a more detailed breakdown is available of the active members and former members, broken down between DB and DC provisions, please provide that breakdown on a separate attachment. Part A of this section: Column 1 = Enter the number of active male members that are subject to either provincial pension jurisdiction ( provincial employment or PE ) or federal pension jurisdiction (i.e. Included Employment or IE ). Do not include the count of members that are reported under Included Employment in those that are reported under provincial employment. Calculate the sum of the PE and IE columns in Column 1 and input the results in Box 10.1 and Box 10.2, respectively. Column 2 = Enter the number of active female members that are categorized as either PE or IE. Do not include the count of members that are reported under Included Employment in those that are reported under provincial employment. Calculate the sum of the PE and IE columns in Column 2 and input the results in Box 10.3 and Box 10.4, respectively. Box 10.5 = Calculate the sum of Box 10.1 plus Box 10.2 plus Box 10.3 plus Box 10.4 and input the result in Box Box 10.6 = Total amount of former members and other beneficiaries not in receipt of a pension. Box 10.7 = Total amount of former members and other beneficiaries in receipt of a pension. Part B of this section: Line (a) = Enter the number of active members at the plan s previous fiscal year end. This is the number reported in the last filed AIR. Line (b) = Enter the number of new entrants. Line (c) = Calculate the sum of 10(B)(a) plus 10(B)(b). Line (d) = Enter the number of retirements. This should include normal, early, postponed, special and disability retirements that occurred during the plan year. Line (e) = Enter the number of deaths that occurred during the plan year. Line (f) = Enter the number of members who have terminated membership in the plan during the plan year. Do not include members on lay-off who have not terminated their membership in the plan. Line (g) = Calculate the sum of 10(B)(d) plus 10(B)(e) plus 10(B)(f). Line (h) = Subtract the number reported in 10(B)(g) from the number reported in 10(B)(c). This line must equal Box If a more detailed breakdown is available of the former members, broken down between applicable pension jurisdictions, please provide that breakdown on a separate attachment. Page 5

8 Explanation of Sections found on the AIR (continued) 11 Filing Fee Please ensure that the appropriate filing fee is submitted along with the AIR. The AIR may be considered incomplete until the appropriate filing fee is submitted. The cheque is to be made payable to the Minister of Finance. The filing fee is GST exempt. Use the worksheet to determine the appropriate filing fee. Box 11.1 is calculated by taking the number reported in Box 10.5 and multiplying that number by $7.00 Box 11.2 is calculated by taking the sum of the number of former members reported in Box 10.6 plus the number of former members reported in Box 10.7 and multiplying that number by $3.50. Calculate the sum of Box 11.1 plus Box 11.2, subject to a minimum of $150 and a maximum of $15,000, and input that number in Box Certification The person or other prescribed body legally responsible for administering the plan must certify the AIR. Third party administrators or other service providers do not meet the definition of administrator under the Act and therefore cannot certify the AIR. Schedule 1 Individual Trustees Please see schedule for the instructions. Filing the Completed Forms Note that the information collected in the AIR is used for the purposes of regulating the pension plan pursuant to the Act and Regulations and the ITA and the ITR. The information is shared with the CRA and with Statistics Canada, pursuant to separate agreements. We may aggregate the information from your pension plan with that of other pension plans for statistical purposes. The AIR and the information provided within are subject to The Freedom of Information and Protection of Privacy Act of Saskatchewan. Please complete and return the AIR, along with the filing fee (cheque made payable to the Minister of Finance), within the prescribed period to: Pensions Division, Financial and Consumer Affairs Authority of Saskatchewan Suite 601, 1919 Saskatchewan Drive Regina SK S4P 4H2 For further information, please contact us Ph: ; Fx: Last Updated: December 1, 2016 (to be used on and after December 1, 2016) Page 6