Allocation or distribution of approved bAllocation or distribution of approved benefit fund surplus

Allocation or distribution of approved benefit fund surplus

10. The board of a friendly society must seek and consider the written advice of the appointed actuary prior to making any allocation or distribution of surplus under modified section 56 of the Act with respect to each approved benefit fund of the friendly society. The appointed actuary's advice must include, as applicable:

(a) the effect of the proposal on the approved benefit fund’s compliance with the applicable solvency and capital standards under the Act;

(b) whether or not the proposed distribution is consistent with representations made to members;

(c) the level of unallocated surplus after the proposed allocation or distribution, relative to the liabilities of the fund, and whether or not the level is unduly large;

(d) the extent to which level of unallocated surplus may give rise to undue intergenerational inequity;

(e) the extent to which the proposal is fair and equitable as regards different members of the particular approved benefit fund and the general membership of the friendly society;

(f) the extent to which the proposal would equitably reflect the relative contribution of different members to the creation of the surplus;

(g) the extent to which the surplus has arisen due to management fund fees being less than the cost of servicing the approved benefit fund;

(h) the possible and probable effects of the proposal on the finances of the approved benefit fund, and the friendly society more generally; and

(i) the probable future course of surplus creation in the approved benefit fund and hence the probable future surplus available for allocation or distribution.

11. For the purposes of modified subsection 56(3) of the Act, a friendly society, with respect to a Defined Contribution fund:

(a) must not distribute any surplus arising in that fund to the management fund or to another benefit fund; and

(b) must, in relation to any surplus in a benefit fund:

(i) allocate or distribute the surplus to members of that benefit fund; or

(ii) maintain the surplus as unallocated surplus of that benefit fund; and

(c) may make transfers (which exclude surplus, but may include any fees) from that fund to the management fund only if the approved benefit fund rules of the fund provide expressly for such transfers.

12. For the purposes of modified subsection 56(3) of the Act, a friendly society, with respect to a Defined Benefit fund may, in accordance with its approved benefit fund rules, allocate or distribute any surplus to one or more of the following: