Words and Phrases - "participating employer"

Does the apportionment condition in s. 147.2(2)(a)(vi) apply where one of the employers ceases to have any involvement with the plan, e.g., because of bankruptcy, winding-up, dissolution, sale of business, or voluntary exit from the plan?

After referencing the requirement in s. 147.2(2)(a)(vi), which “ensures that any unfunded liability associated with a participating employer, and thus the employer’s contributions in respect of that liability, are not excessive,” and the s. 147.2(2)(d) requirement that “there is a reasonable determination of each participating employer’s actuarial surplus,” CRA stated that in such situation:

[T]he particular employer would nonetheless continue to be considered a participating employer … . Consequently, in applying the apportionment condition described above, assets and liabilities should continue to be apportioned to that employer. In this regard, we understand that your Directorate considers reasonable an apportionment method that preserves the funding ratio applicable to the employer as at the time the employer ceased to be actively involved in the plan. This helps avoid problems that could arise from experience gains or losses. …

This position applies regardless of whether the particular employer ceases to exist, except where specific rules provide otherwise. Paragraph 147.2(8) provides that a former employee of a predecessor employer of a participating employer in relation to a pension plan is deemed to be a former employee of the participating employer in relation to the plan if certain conditions are met.