Important considerations when converting a defined contribution plan into an SIPP
This section presents only the main points to consider. The Supplemental Pension Plans Act remains the best tool for guiding your actions and decisions.
Important points to consider
- The first step in converting a defined contribution plan into a simplified pension plan (SIPP) consists of filing an application for conversion of a defined contribution pension plan into a simplified pension plan.
- The pension plan must be one affected by paragraph 2 or 3 of section 116 of the Supplemental Pension Plans Act.
- The party who can decide to convert a plan is the one who has the power to terminate it, usually the employer. That power may be shared with the union (if any) associated with the employer.
- Where a plan has more than one employer, the decision to convert it must be a joint decisions of all employers party to the plan.
- All the active members must be subject to the Québec Supplemental Pension Plans Act.
- The categories of employees that are eligible for a pension plan must also be entitled to enrol in an SIPP.
- The pension plan must not have surplus assets as at the conversion date. If so, the surplus assets must be used before the effective date of the conversion according to the conditions set out in the Supplemental Pension Plans Act.
- All employer and member contributions required until the conversion date as well as additional voluntary contributions received must be paid into the pension fund.
- No plan matters must be pending before Retraite Québec (for example, sending the required annual information return and paying the fees), and amendments made to the plan must have been sent to Retraite Québec.
Other points to be aware of