Temporary easing measures regarding the administration of supplemental pension plans

In general, several deadlines for providing documents to Retraite Québec or members have been extended by three months. See the following table for further details.

The extension applies to all the deadlines that had not expired by 12 March 2020, but which would have expired in 2020.

Impact on a plan whose fiscal year ended on 31 December 2019

Yes, the deadline in that case has also been extended.

We do not expect to extend the deadlines for statements of cessation of membership to members, given that upon the loss of employment, former employees may need their funds. Although retirement savings are generally locked‑in, some exceptions apply. It is therefore important to not to extend the deadlines so that employee can access those funds.

Yes.

Yes.

No. The 2020 annual meeting must be held. In the current context, Retraite Québec believes it is important that the pension committee take the time to present its 2019 report and that members and beneficiaries be able to ask questions about their pension plan.

The meeting can cover both 2019 and 2020, provided it is held at the beginning of 2021. The pension committee has until December 2020 to call the annual meeting for 2019. The meeting is intended to provide members and beneficiaries with information about the pension plan's financial situation and about all amendments made to the plan in 2019; it must therefore be held within a reasonable time following the call to meeting.

Yes, videoconferencing or other information technologies can be used. Moreover, there are no legal requirements concerning the location of the annual meeting. However, the pension committee must comply with the law with regard to the appointment of the committee members designated at the meeting.

No. The terms of the members designated at the annual meeting cannot be extended by a year. Members must be designated at the meeting to be able to start a new term. However, once their term has ended, they remain in office until their replacement takes office or until their term is renewed.

Yes. The vote can be held using the method proposed by the pension committee at the annual meeting, or, if the members or non-active members and beneficiaries at the meeting reject this proposal, using another method determined at the annual meeting, which must allow those present at the meeting to designate committee members during the meeting.

Yes. The vote can be held using the method proposed by the pension committee at the annual meeting, or, if the members or non-active members and beneficiaries at the meeting reject this proposal, using another method determined at the annual meeting, which must allow those present at the meeting to designate committee members during the meeting.

The degree varies depending on the type of statement and the information requested.

Annual statement for active members – Part 1

Objective:
To indicate the amount that could have been transferred if the member had ceased to be active at the end of the fiscal year and had requested the transfer of his or her benefits.

Degree:
Degree of solvency that would have been used at the end of the fiscal year.

Example 1: Fiscal year ending on 31 December 2019

The most recent degree is generally the one indicated on the last report or notice sent to Retraite Québec on 31 December 2019, i.e. the degree established as at 31 December 2018.

Example 2: Fiscal year ending on 31 December 2020

The degree of solvency must correspond to the most recent degree of solvency estimated 2020. If no degree of solvency has been estimated, it must correspond to the last one that was sent to Retraite Québec, that is, the one as at 31 December 2019.

Note that if the degree of solvency as at 31 December 2020 was sent to Retraite Québec during production of the annual statements, it cannot be used to calculate the adjusted value in proportion to the degree of solvency.

Annual statement for non-active members – Part 1

Objective:

1. To indicate the amount that could have been transferred if the member were still eligible to transfer his or her benefits and had so requested at the end of the fiscal year.
2. To inform members about the evolution of the solvency ratio for the purpose of the possible transfer of their benefits.

Degree:

1. Degree of solvency that would have been used at the end of the fiscal year (see examples for active members).
2. The most recent degree set at the time the statement is prepared, if different from the degree that would have been used at the end of the fiscal year. See example below.
   

Examples

The statements as at 31 December 2019 are prepared in October 2020. At that time, the most recent event is the death of a member who had not retired, in August 2020. The degree of solvency as at 31 July 2020 was estimated. The statement should indicate this degree.

Statements as at 31 December 2020 are prepared in September 2021. The notice required under section 119.1 of the Supplemental Pension Plans Act as at 31 December 2020 was sent to Retraite Québec on 31 August 2021. The statement must indicate the degree of solvency as at 31 December 2020.

Annual statement – Part 2

Objective:
To take the plan's financial situation into account.

Degree:
The most recent degree set for funding purposes, and not for payment purposes, on the date the statement is prepared.

Example 1: Fiscal year ending 31 December 2019

The statements are prepared in October 2020. The notice provided for under section 119.1 of the Supplemental Pension Plans Act as at 31 December 2019 is sent to Retraite Québec on 15 September 2020. The statement should indicate the degree specified on the 31 December 2019 notice. Of course, information about the evolution of the plan's financial situation can be added after that date.

Example 2: Fiscal year ending 31 December 2020

The statements are prepared in September 2021. The notice provided for under section 119.1 of the Supplemental Pension Plans Act as at 31 December 2020 is sent to Retraite Québec on 31 August 2021. The statement should indicate the degree specified on the 31 December 2020 notice.

Note that the information mentioned above applies both to active members and non-active members.

Statement of cessation of membership

Objective:
To provide information about amounts that can be transferred or reimbursed.

Degree:
The degree specified in the temporary measures.

Example: End of active membership on 20 July 2020. The degree indicated must be the one estimated as at 30 June 2020.

The permanent rules are the ones that must be explained. However, the temporary rules should also be explained if they are likely to apply, for example, in the case of statements of cessation of membership issued in 2020.

The declining financial markets have resulted in a significantly decreasing degree of solvency over the last few months. Without this temporary measure, the pension fund is at risk of paying out more than the current financial situation can allow for.

The measure is designed to:

• protect members and beneficiaries who remain in the plan, by halting payment of transfer values that are too high
• maintaining the possibility for members to have their benefits transferred out of the plan, thus providing any needed access to liquidity through Life Income Fund (LIF) withdrawals.

The measure applies to all payments between 17 April 2020 and 31 December 2020.

Yes.

The actuary must take into account, in particular, the real rate of return of the pension fund, changes in interest rates on a solvency basis and contributions that were made since the plan's last complete actuarial valuation.

Furthermore, it is not necessary to provide the estimate unless Retraite Québec requests it.

The pension committee must contact those members to explain that the rules regarding payments have changed. A member in that situation should then confirm with the pension committee whether he or she still wishes to have the transfer made in light of the fact that the degree of solvency used for the payment has changed.

Should the 60-day deadline granted to the pension committee for the transfer have already expired, the deadline can be extended.

Yes. It will allow Retraite Québec to continue monitoring the financial situation of pension plans as at 31 December 2019.

It is compulsory.

Residual benefits are amounts (including interest) to which members or beneficiaries are entitled but which could not be paid to him or her when the initial payment was made.

Example:

The value of a member's benefits at the end of his or her active membership, on 5 April 2020, is $10 000. The pension committee informs the member that, in conformity with the last paragraph under section 66 of the Supplemental Pension Plans Act, his or her benefits will be refunded. On 15 April 2020, the last notice, referred to in section 119.1 of the Act and sent to Retraite Québec, indicated a degree of solvency of 80%. However, the degree of solvency as at 31 March 2020 was 70%.

The member will receive an initial payment of $7000. The residual benefits total $3000, and, once paid into the fund, they will be refunded to the member. (To make this example simpler, we have not included any interest.)

The provision applicable to initial payments is the most advantageous.

However, if the plan text so provides, a member or beneficiary can receive all or part of the payment of the balance of the value of the benefits that was not paid to him or her in the initial payment (residual benefits). In such a case, the residual benefits must first be paid into the pension fund.

Example:

The plan provides that a member is entitled to the highest amount between the amount he or she will receive under the temporary measure or under the permanent measure. If the permanent measure is applied, the degree of solvency is 80%. If the temporary measure is applied, it is 70%. The value of the member's benefits is $100 000.

During the initial payment, the member will receive $70 000. The residual benefits are $10 000, and once that amount has been paid into the pension fund, the residual benefits can then be paid to the member. (To make this example simpler, we did not include any interest.)

No. The Regulation respecting supplemental pension plans was amended in this respect in 2018. Since 1 April 2018, the entire amount owed to him or her must be paid to the spouse, with interest, regardless of the plan's degree of solvency. The temporary measure does not change the rule.

No.

No.

It is the date we must use to calculate the value of the benefits, that is, most often, the date on which a person ended his or her active membership in a plan, the date of the transfer request for the value of the benefits or the date on which the person dies.

Example:

A member's active plan membership ends on 1 May 2020. A statement of cessation of membership on which the value of his or her benefits as at 1 May 2020 is indicated must be provided to him or her.

The plan provides that the member can request the transfer of the value of his or her benefits at any time.

• The member requests the transfer of the value of his or her benefits within 90 days after receiving his or her statement of cessation of membership, more specifically on 10 August 2020. The transfer will be carried out based on the value of his or her benefits on 1 May 2020 and the degree of solvency as at 30 April 2020 (the last working day of the month preceding 1 May 2020).
• The member requests the transfer of the value of his or her benefits more than 90 days after receiving his or her statement of cessation of membership, more specifically on 20 October 2020. The transfer will be carried out based on the value of his or her benefits on 20 October 2020 and the degree of solvency as at 30 September 2020 (the last working day of the month preceding 20 October 2020).

Please note that section 143 of the Supplemental Pension Plans Act was amended on 22 February 2018. Since then, we must use the date on which the value of the member's benefits was determined to obtain the applicable degree of solvency.

When the real rate of return of the pension fund cannot be determined, it must be estimated based on the best information available.

Until the most recent degree of solvency has been sent to Retraite Québec through an actuarial valuation or statement covering the plan's financial situation, the most recent estimated degree of solvency in 2020 must be used.

Example:

In 2020, Julie is the only member to have ceased active participation in the plan, on 11 July 2020. The degree of solvency was estimated as at 30 June 2020.

For this pension plan, the value of the benefits established after 31 December 2020 will be payed based on the degree of solvency estimated as at 30 June 2020 until a more recent valuation or notice presenting the plan's financial situation has been sent to Retraite Québec.

Example 1

Nicolas ceased to be an active member on 9 November 2020.

The degree of solvency applicable for the payment of his benefits is the one estimated as at 30 October 2020.

Although his Statement of cessation of membership was sent in January 2021 and that his benefits are paid in February 2021, it does not change the rule for determining the degree of solvency applicable for the payment of Nicolas' benefits.

Camille ceased to be an active member on 11 January 2021. For that plan, the last degree of solvency estimated in 2020 is the one as at 30 November 2020.

The degree of solvency applicable for the payment of her benefits for that plan is the last one estimated in 2020, that is, the one as at 30 November 2020. This rule applies as long as Retraite Québec has not been informed of a more recent degree of solvency following an actuarial valuation or a notice covering the plan's financial situation. As of 11 January 2021, none of these documents have been sent to Retraite Québec. Therefore, we must use the estimated degree of solvency as at 30 November 2020.

Although Camille's Statement of cessation of membership was sent in February 2021, that Retraite Québec received the notice on the financial position of the plan as at 31 December 2020 in April 2021 and that Camille's benefits were paid in May 2021, it does not change the rule for determining the degree of solvency, which is indicated on her Statement of cessation of membership, that is, the one as at 30 November 2020.

In short, for payments made in 2021:

• when the value of the benefits is established on a date prior to 1 January 2021, the degree of solvency that should be used is the one established on the month that precedes the date on which the value of your benefits is assessed for 2020, but not before 31 March 2020;
• when the value of the benefits is established after 31 December 2020, the last degree of solvency estimated in 2020 is the one determined the last time in 2020, and will be used until an actuarial valuation report or a notice presenting the plan's financial situation has been sent to Retraite Québec;
• sending one of those documents terminates the temporary measure regarding payments based on the estimated degree of solvency;
• the degree of solvency indicated on the Statement on the date on which the value of the benefits of members was determined is the one that must be used for payments made after 31 December 2020.
  

Yes. The benefits of members and beneficiaries in a legislative jurisdiction that has signed the Agreement are paid in accordance with the major authority's rules of payment. Consequently:

• the benefits of members outside Québec are paid first in proportion to the degree of solvency of the plan established in accordance with Québec's rules, as provided for under section 6 of Schedule B of the Agreement. The initial payment will therefore be made based on the temporary measure;
• given that members and beneficiaries outside Québec are entitled to receive 100% of their benefits, the balance that remains unpaid after the initial payment must be funded and paid within the following 5 years (or at normal retirement age) as provided for under section 146 of the Supplemental Pension Plans Act.

No. However, the benefits of members and beneficiaries in a legislative jurisdiction that has signed the Agreement are paid in accordance with the major authority's rules of payment. Consequently:

• the benefits of members in Québec are paid first in proportion to the degree of solvency of the plan established in accordance with the major authority's rules, as provided for under section 6 of Schedule B of the Agreement;
• the balance of the benefits that remains unpaid after the initial payment must be funded and paid in accordance with the major authority's rules, if applicable.

However, the balance of the benefits to which members in Québec are entitled must be in accordance with Québec's rules. Consequently, when the plan text stipulates that the benefits of members in Québec are to be paid based on the degree of solvency, the amount corresponding to the initial payment of the benefits of members in Québec cannot exceed the amount to which they would have been entitled had Québec's rules been applied.

More specifically, in the case of a pension plan registered in Ontario, the value of the benefits of members in Québec to be paid must be determined based on the estimated degree of solvency. The initial payment of these members' benefits will then be set based on the degree of solvency applicable to the plan. The balance of benefits, if applicable, will be paid to members in accordance with Ontario's rules.

Examples

Simon is a member in Québec. His benefits are valued at $100 000.
Bruce is a member in Ontario. His benefits are valued at $100 000.

Examples 1 and 2

Degree of solvency in Québec: 80%
Transfer ratio in Ontario: 75%

Example 1 – Major authority: Québec

Example 2 – Major authority: Ontario

Examples 3 and 4

Degree of solvency in Québec: 75%
Transfer ratio in Ontario: 80%

Example 3 – Major authority: Québec

Example 4 – Major authority: Ontario

Yes. The amount of the initial payment and the deadline for the transfer of benefits are provided for under section 6 (f) in Schedule B of the Agreement. You must therefore apply the major authority's rules. Québec members always have the right to transfer their benefits; only the deadline for transferring the benefits is affected.

This measure allows active members under a supplemental pension plan under which the accrual of new benefits has been suspended to maintain their active membership.

To do so, the suspension must meet certain conditions:

• It must start in 2020.
• It cannot exceed one year.
• It can only affect the accrual of new benefits starting on 15 July 2020.

No, the measure has no impact on accrued benefits.

Note that you can already modify a pension plan to suspend the accrual of benefits. However, in the current context, members affected by the suspension cease to be active members in the plan. Moreover, when a pension plan no longer has any active members, Retraite Québec has the right to terminate the plan.

Under this measure, members affected by the suspension do not cease to be active members in the pension plan where the conditions set out in the draft regulation respecting temporary relief measures for supplemental pension plans given the health emergency declared on 13 March 2020 in response to the COVID‑19 pandemic are met.

Under this measure, simplified pension plans are not required to pay out members' benefits.

Yes, all supplemental pension plans are targeted, including simplified pension plans.

The measure does not, however, target voluntary retirement savings plans.

An application for registration of the amendments to the plan's text must be filed with Retraite Québec as soon as possible.

In the case of a pension plan other than a simplified pension plan, these amendments reducing benefits can take effect as of the date the amendments to the plan's text come into effect.

In the case of a simplified pension plan, these amendments reducing benefits can take effect as of the date the amendments to the plan's text come into effect or, in the case of a pension plan with standard provisions and variations, as of the date indicated on the notice sent to members, provided the plan was amended to include the variation in its provisions.

Note that the effective date of the amendment or the date indicated on the notice cannot be prior to the prepublication date of the draft regulation.

Yes, according to the rules for pension plans other than simplified and defined contribution pension plans.

An actuarial valuation report that has already been submitted can be revised to take the amendments into account and be resubmitted to Retraite Québec.

A date must be indicated in the text of the amendment.

The date can be subsequently readjusted as needed by sending another amendment to the plan's text, while meeting the conditions set out in the draft regulation respecting temporary relief measures for supplemental pension plans given the health emergency declared on 13 March 2020 in response to the COVID‑19 pandemic.

If members are no longer accruing benefits, the current service portion of their contribution should not be paid into the plan.

Amortization payments, however, must be maintained.

Yes, but only for the remainder of 2020. A relief measure  to this effect was announced by the federal government on 5 May 2020.

Yes. The rules of the legislative jurisdiction of each member apply when the plan is amended to reduce benefits.

This measure targets members subject to the Supplemental Pension Plans Act.