Newsletter no. 93-5, Surplus Allocation on Termination or Conversion of a Defined Benefit Provision

December 1, 1993

This update is to advise you of our requirements for plan amendments when surplus is used to improve benefits under a defined benefit provision that is terminated, or converted to a money purchase provision.

If benefits have ceased to accrue on or before December 31, 1993 under a defined benefit provision, and surplus is used to increase those benefits, we will not require amendments for the increases. Instead, we will consider the plan to have been amended for purposes of the conditions for registration and transfers, as long as the following conditions are met:

The following examples outline several of the benefit improvements that may be provided.

All distributions must be made under the provision as soon as practicable, generally within one year.

Note that certain defined benefit plans do not have to file amendments to comply with the new registration requirements. Please refer to PRU 93-4 for details.

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