The federal government intends to introduce regulations providing Canada Post with four-year relief from the requirement to make special payments to the pension plan, as ordinarily required under the Pension Benefits Standards Act, 1985.
At the end of 2012, Canada Post’s pension plan was fully funded on a going-concern basis but had a solvency deficit of approximately $6.5 billion on a market value basis.
“The regulations provide Canada Post with more time to pay off its significant pension deficit so that it can restructure its operations for long-term viability,” says Kevin Sorenson, Minister of State for Finance. “We believe these circumstances merit one-time transitional assistance.”
As part of Canada Post’s commitment to return to long-term viability, executive compensation will be restricted while the regulations remain in effect.