Examples of information to be provided when obtaining consent with regard to an amendment reducing benefits retroactively under a simplified pension plan (SIPP)
In order to obtain the informed consent of members affected by an amendment reducing benefits retroactively under an SIPP, the members must first be provided with adequate and sufficient information. Below is an example of a document in the case of a decrease in employer contributions.
Note that...
The document provided to the affected members in order to obtain their consent with regard to an amendment reducing benefits retroactively is not the same as the notice informing all members of the proposed amendment.
Example: Decrease in employer contributions
Employer contributions before the amendment: | 5% of the member's salary |
Employer contributions after the amendment: | 3% of the member's salary |
Effective date of the amendment: | 1 January 2012 |
Date on which the notice informing members of the amendment is sent: | 30 June 2012 |
Who must consent to the amendment: | All active members as at 30 June 2012 as well as those who ceased to be active members between 1 January and 30 June 2012 |
The members were informed of the amendment on 30 June 2012. For the reduction to apply between 1 January and 30 June 2012, affected members must give their consent.
We expect that each person who must give consent to the amendment receive, at a minimum, the information in the following two examples in order to understand how the decrease in employer contributions will affect him or her.
30 June 2012
Ms. E. Forest
Address
Subject: Amendment reducing benefits retroactively pertaining to employer contributions under the ABC Inc. simplified pension plan
Proposed amendment
Here you must provide:
- an explanation of the situation;
- the effective date of the amendment;
- the employer contributions required both before and after the amendment.
INFORMATION PERTAINING TO YOUR SITUATION
For the period from 1 January to 30 June 2012:
- your salary was $30 000;
- the employer contributions required before the amendment are $1500;
- the employer contributions required after the amendment are $900;
- the employer contributions decrease by 600 $ as a result of the amendment.
Consent
I hereby consent that the amendment whereby the employer contributions under the ABC Inc. simplified pension plan are decreased have retroactive effect from 1 January 2012.
30 June 2012
Decrease in the employer contributions
for
the ABC Inc. simplified pension plan
Proposed amendment
Here you must provide:
- an explanation of the situation;
- the effective date of the amendment;
- the employer contributions required both before and after the amendment.
Information
For the period from 1 January to 30 June 2012, the amendment reduces employer contributions by 2% of the salary you received during that time.
Consent
I hereby consent that the amendment whereby the employer contributions under the ABC Inc. simplified pension plan are decreased have retroactive effect from 1 January 2012.