Procedure for converting a defined contribution pension plan into an SIPP
The following procedure can be used either by an
employer who acts as the administrator of a plan with less than 51 members and beneficiaries or by a pension committee.
Notify
Retraite Québec of your intention to convert your existing defined contribution plan into an SIPP
You must send the required
Form I to
Retraite Québec, as soon as the decision to convert the existing plan into a simplified pension plan (SIPP) is made, so as to obtain
Retraite Québec's confirmation that the conversion process can begin.
Conversion date of the plan
Example
- To convert a plan as at 30 September, the notice of conversion must be sent between 1 August (i.e., 30 September less 60 days) and 30 October (i.e., 30 September plus 30 days)
- If the notice is sent after 30 October, the written consent of the active members will be required.
- The employer's participation in the
SIPP will begin on 1 October.
Send a notice of conversion
You must send a notice of conversion to:
- all members and beneficiaries of the existing pension plan
- all concerned unions (if any)
- the pension committee
- the insurer, where appropriate.
A copy of the notice must be sent to
Retraite Québec without delay.
Important!
A notice of conversion must be sent even where the plan is established by a collective agreement or has been negotiated with the union.
Contents of the notice of conversion
The notice must include:
- the name of the plan and its registration number at
Retraite Québec
- the plan's conversion date
- the members and beneficiaries affected by the conversion (without mentioning their names)
- the fact that the existing plan is being terminated in order to be converted into an
SIPP offer by the designated financial institution.
In addition, for the active members of the existing plan who will be enrolled in the
SIPP, the notice must include:
Send statements of benefits to the members and beneficiaries
Within
60 days following the latest of the conversion date and the date of the sending of the notice of conversion, you must send a
statement of benefits to each member and beneficiary of the existing plan.
See details of the statement (Appendix I).
Pay the members' and beneficiaries' benefits
After taking into consideration the observations of the members and beneficiaries, you must pay their benefits within 60 days following the date on which the statements of benefits are sent.
Payment methods according the category of members and beneficiaries
Active members who will be enrolled in the SIPP | All defined contribution benefits will be transferred to the SIPP. Those benefits will be credited to the member's locked-in account, except for any additional voluntary contributions and not-locked in amounts resulting from a previous transfer, which will be credited to the member's not locked-in account. Insured benefits (if any) will be transferred to one of the retirement savings instruments referred to in section 236 of the
Supplemental Pension Plans Act, in accordance with the member's instructions. |
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Members and beneficiaries who will not be enrolled in the
SIPP and who have not begun receiving a pension | The value of their benefits will be transferred to one of the retirement savings instruments referred to in section 236 of the Supplemental Pension Plans Act, in accordance with the member's instructions. |
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Members and beneficiaries who are already receiving a pension | The insurer will continue to pay the pensions of those members and beneficiaries. |
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Submit an annual information return
If the conversion date coincides with the ending date of the plan's fiscal year, you must file an
annual information return (AIR) with
Retraite Québec, including appendixes 1 and 2 and sections 1, 2 and 3 of appendix 3A.
You must submit the return, accompanied with the required fees, no later than the sending date of
Form II (which is an appendix to Newsletter number 17).
Make a report to
Retraite Québec on the payment of benefits
Within 30 days following payment of the members' and beneficiaries' benefits, send a report on that payment to
Retraite Québec by submitting
Form II, duly completed.
To find out more...
Newsletter number 17, published by the
Régie des rentes du Québec in June 2004.