Limited Liability Plans

Limited Liability Plans

Limited Liability Plans (LLP) are defined benefit pension plan where the funding obligations are limited by a collective bargaining agreement or contract and where accrued and/or future benefits can be reduced if there is a funding deficit in the LLP. However, plans which are specified in Table 1 of The Pension Benefits Regulations, 1993 are not subject to the rules for limited liability plans. Rather, they Regulations prescribe different rules for those plans.

Effective August 25, 2017, the Regulations were amended to establish a new funding and regulatory regime for LLPs (“LLP Regime”).

In general, the LLP Regime is as follows:

• permanent exemption from funding solvency deficiencies;
• requirements respecting provision for adverse deviations;
• restrictions on benefit improvements;
• allow LLP pension plan contracts to be amended to provide the option to calculate commuted values (CV) based on the plan’s going concern assumptions and to permanently decrease the CV to the funded position of the plan; and
• enhanced member communications.

For more information about limited liability plans read the Limited Liability Plan Guide.