ESSAR STEEL ALGOMA INC. PENSION PLANS FOR SALARIED EMPLOYEES AND HOURLY EMPLOYEES, O. Reg. 484/18

• Jurisdiction: Ontario

ontario regulation 484/18

made under the

Pension Benefits Act

Made: November 28, 2018
Filed: November 30, 2018
Published on e-Laws: November 30, 2018
Printed in The Ontario Gazette: December 15, 2018

Essar Steel Algoma Inc. Pension Plans for Salaried Employees and Hourly Employees

General

Implementation of certain agreements

1. This Regulation implements, in part, the following agreements:

1. The Pension Matters Agreement effective November 16, 2018 between the Consenting Creditors, Algoma Steel Inc. and United Steelworkers on behalf of itself and its Local 2251.

2. The Pension Matters Agreement effective November 16, 2018 between Algoma Steel Inc. and The United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union (United Steelworkers) on behalf itself and its Local 2724.

3. The agreement, effective November 30, 2018, in respect of the Salaried Employees Plan between Essar Steel Algoma Inc. and Algoma Steel Inc. and The United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union (United Steelworkers) on behalf of itself and its Local Union 2724 members of The Essar Steel Algoma Inc. Pension Plan for Salaried Employees, registered under the Act as number 1079896 and the former members and retired members (or the surviving spouses of such members) of The Essar Steel Algoma Inc. Pension Plan for Salaried Employees, registered under the Act as number 1079896, whether or not such members were represented by a union when they were employed with Essar Steel Algoma Inc., Essar Tech Algoma Inc., Algoma Holdings B.V., Essar Steel Algoma (Alberta) ULC, Cannelton Iron Ore Company or Essar Steel Algoma Inc. USA, but with the exception of Opt-Out Individuals within the meaning of the Amended and Restated Representative Counsel Order.

4. The agreement, effective November 30, 2018, in respect of the Hourly Employees Plan between Essar Steel Algoma Inc. and Algoma Steel Inc. and The United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union (United Steelworkers) on behalf of itself and its Local Union 2251 members of The Essar Steel Algoma Inc. Pension Plan for Hourly Employees, registered under the Act as number 1079904, and The United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union, Local Union 2251, on behalf of former members and retired members (or the surviving spouses of such members) of The Essar Steel Algoma Inc. Pension Plan for Hourly Employees, registered under the Act as number 1079904 who were represented by Local 2251 immediately prior to the date on which they retired or their employment was otherwise terminated, but with the exception of 2251 Hourly Plan Opt-Out Individuals within the meaning of the Local 2251 Representation Order and the former members and retired members (or the surviving spouses of such members) of The Essar Steel Algoma Inc. Pension Plan for Hourly Employees, registered under the Act as number 1079904 that opted out of representation by Local 2251 within the meaning of the Local 2251 Representation Order, whether or not such members were represented by a union when they were employed with Essar Steel Algoma Inc., Essar Tech Algoma Inc., Algoma Holdings B.V., Essar Steel Algoma (Alberta) ULC, Cannelton Iron Ore Company or Essar Steel Algoma Inc. USA, but with the exception of Opt-Out Individuals within the meaning of the Amended and Restated Representative Counsel Order.

Interpretation

2. (1) In this Regulation,

“adjusted solvency deficiency” has the meaning set out in subsection (3);

“Amended and Restated Representative Counsel Order” means the order of the Ontario Superior Court of Justice (Commercial List) in court file number CV-15-000011169-00CL dated November 9, 2015, entitled “Amended and Restated Representative Counsel Order”, as amended by the Local 2251 Representation Order;

“annual report” means, in relation to the Hourly Employees Plan or the Salaried Employees Plan, the valuation report required under section 21 or 24, as the case may be;

“Consenting Creditors” means those Essar Steel Algoma Inc., pre-petition term lenders and holders of its 9.5 per cent pre-petition senior secured notes due 2019 that are parties to a Restructuring Support Agreement dated September 15, 2016 (as amended and restated as of August 15, 2017 and as further amended from time to time);

“General Regulation” means Regulation 909 of the Revised Regulations of Ontario, 1990 (General) made under the Act;

“going concern funded ratio” means, in relation to the Hourly Employees Plan or the Salaried Employees Plan, the ratio of “Y” to “Z”, where,

“Y” is the value of the assets of the pension plan determined on the basis of a going concern valuation, including accrued and receivable income, and

“Z” is the total amount of the going concern liabilities of the pension plan;

“Hourly Employees Plan” means The Essar Steel Algoma Inc. Pension Plan for Hourly Employees, registered under the Act as number 1079904;

“Local 2251 Representation Order” means the order of the Ontario Superior Court of Justice (Commercial List) in court file number CV-15-000011169-00CL dated December 5, 2017, entitled “Local 2251 Representation Order”;

“Salaried Employees Plan” means The Essar Steel Algoma Inc. Pension Plan for Salaried Employees, registered under the Act as number 1079896;

“solvency ratio” means, in relation to the Hourly Employees Plan or the Salaried Employees Plan, the ratio of “Y” to “Z”, where,

“Y” is the total amount of the solvency assets of the pension plan related to defined benefits and ancillary benefits, and

“Z” is the total amount of the solvency liabilities related to defined benefits and ancillary benefits of the pension plan.

(2) Expressions in this Regulation have the same meaning as in the General Regulation, except where otherwise indicated.

(3) The adjusted solvency deficiency of a pension plan as of a particular valuation date is the amount, if any, by which 85 per cent of the solvency liabilities of the pension plan exceeds the solvency assets of the pension plan.

(4) For the purposes of this Regulation, benefit improvements are made under a pension plan if an amendment to the plan affects the pensions, pension benefits or ancillary benefits provided by the plan and increases the amount of the normal cost, the going concern liabilities or the solvency liabilities of the plan.

Solvency liabilities — exclusion of plant closure benefit

3. For the purposes of the definition of “solvency liabilities” in subsection 1 (2) of the General Regulation, the solvency liabilities of the Hourly Employees Plan and the Salaried Employees Plan also exclude liabilities for the plant closure benefit to which individuals who were members on December 31, 2001 are entitled under the relevant plan.

Benefit allocation method

4. For the purposes of this Regulation, a benefit allocation method shall be used to determine the normal cost and going concern liabilities of a pension plan.

Application of General Regulation

Application of General Regulation

5. The General Regulation applies to the Hourly Employees Plan and the Salaried Employees Plan except as provided in this Regulation.

Same

6. (1) For greater certainty, the General Regulation applies with respect to the Hourly Employees Plan and the Salaried Employees Plan on and after the earlier of,

(a) 20 years after the day this Regulation comes into force; or

(b) the date on which the employer is required to commence funding the pension plans in accordance with the General Regulation, if the employer makes the elections described in section 7.

(2) The only provisions of this Regulation that continue to apply after the General Regulation begins to apply are,

(a) this section and sections 1 to 3 and 10;

(b) section 19 if, before the General Regulation begins to apply, the administrators of the Hourly Employees Plan and of the Salaried Employees Plan have not filed reports showing that both pension plans have a solvency ratio of equal to or greater than 0.85; and

(c) subsection 20 (2) if, before the General Regulation begins to apply, the administrators of the Hourly Employees Plan and of the Salaried Employees Plan have filed reports showing that both pension plans have a solvency ratio of equal to or greater than 0.85.

Election to fund in accordance with General Regulation

7. (1) The employer may file elections with the Superintendent to commence funding both the Hourly Employees Plan and the Salaried Employees Plan in accordance with the General Regulation instead of in accordance with this Regulation if both pension plans have an available actuarial surplus determined in accordance with section 7.0.2 of the General Regulation.

(2) Both elections must be filed at the same time and they cannot be withdrawn.

(3) The final report for each pension plan required under section 25 must be filed with the elections.

(4) The effective date on which the employer shall commence funding the pension plans in accordance with the General Regulation is the valuation date of the final reports.

Funding re new members

8. If the Hourly Employees Plan or the Salaried Employees Plan is amended to permit new members to join the pension plan,

(a) any going concern unfunded liability in respect of the new members, any reduced solvency deficiency in respect of the new members and any increase in the going concern liabilities of the pension plan as a result of the amendment permitting new members to join the pension plan and any subsequent amendments in respect of the new members shall be funded in accordance with the General Regulation as if none of the exceptions or modifications to the General Regulation set out in this Regulation applied; and

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