Financial and Consumer Affairs Authority of Saskatchewan

FCAA is Saskatchewan’s financial and consumer marketplace regulator.

Defined benefit plans - transfer deficiencies

  • Defined benefit plans - transfer deficiencies

    In most cases, when transferring the commuted value of a benefit from a defined benefit plan, the plan administrator must hold back the amount of the transfer deficiency from the transfer amount, unless the employer remits sufficient money to eliminate the transfer deficiency, or the transfer deficiency is a small amount.

    The transfer deficiency rules do not apply to a commuted value that is calculated on a going concern basis where the plan is a limited liability plan, as defined under The Pensions Benefit Regulations, 1993. Limited liability plans are a certain type of defined benefit plan where the employer’s funding obligation is limited by a collective bargaining agreement or contract.

    The transfer deficiency that has been held back must be transferred within 5 years of the date of the initial transfer, or when the plan becomes solvent, whichever comes first. The plan sponsor may also remit to the plan the amount required to eliminate the transfer deficiency and pay the transfer deficiency immediately.

    A transfer deficiency is the amount by which the commuted value of a benefit exceeds the product of the commuted value and the plan’s solvency ratio.

    A plan's solvency ratio is the fraction obtained by dividing the market value of the assets currently held in the plan by the liabilities of the plan on a plan termination basis.

    For more information on the administration of transfer deficiencies read the Transfer Deficiencies bulletin.

    For more information on commuted value calculations for limited liability plans read the Limited Liability Plan Guide.

    Pensions Division

    Suite 601, 1919 Saskatchewan Drive

    Regina, Saskatchewan S4P 4H2

    Tel: (306)787-7650

    Fax: (306)798-4425

    Email: pensions@gov.sk.ca

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