r-15.1, r. 6.2 - General Regulation respecting supplemental pension plans

Updated to 13 June 2019

This document has official status.

chapter R-15.1, r. 6.2

General Regulation respecting supplemental pension plans

Supplemental Pension Plans Act

(chapter R-15.1, s. 312).

This Regulation was replaced by the Regulation respecting supplemental pension plans (chapter R-15.1, r. 6, s. 69) except with respect to:

(1) matters pending referred to in section 286 of the Supplemental Pension Plans Act (chapter R-15.1) and matters governed by the Act respecting supplemental pension plans (chapter R-17) under the first paragraph of section 73 of the Regulation respecting supplemental pension plans, to the extent that that Act applies to those matters;

(2) (paragraph revoked);

(3) pension plans governed by an agreement concluded with the representatives of a government other than the Gouvernement du Québec under section 74 of the Act respecting supplemental pension plans, for which sections 21, 53 and 92 of that General Regulation continue to apply, notwithstanding any inconsistent provision of the Supplemental Pension Plan Act, until the date of tabling in the National Assembly of a new agreement concluded under section 249 of the Supplemental Pension Plan Act.

The Act respecting supplemental pension plans (chapter R-17) was replaced by the Supplemental Pension Plans Act (chapter R-15.1). (2000, chapter 41, s. 172)

R.R.Q., 1981, c. R-17, r. 1; O.C. 1158-90, s. 69.

DIVISION I DEFINITIONS AND APPLICATION

1. In this Regulation,

(a)  “accountant” means a person authorized by the Chartered Accountants Act (chapter C-48) to practise the profession of Public Accountant or, outside Québec, any person the Régie des rentes du Québec (Board) considers as duly qualified;

(b)  “actuary” means a Fellow of the Canadian Institute of Actuaries;

(c)  “initial unfunded liability” means an amount to be funded:

i.  to ensure that the plan is fully funded when submitted for registration;

ii.  resulting from an amendment made after the registration of the plan to ensure that the plan, taking into account all other initial unfunded liabilities or experience deficiencies, is fully funded when so amended;

iii.  resulting from a change made, on the occasion of an actuarial valuation, in the valuation method or in the assumptions on which the valuation of the plan is based to ensure that the plan, taking into account all other initial unfunded liabilities or experience deficiencies, is fully funded at the time of such change;

(d)  “experience deficiency” means an amount to be funded other than an initial unfunded liability or an unpaid contribution to ensure that the plan is fully funded;

(e)  “special contribution” means an annual contribution required to liquidate an initial unfunded liability or an experience deficiency;

(f)  “special supplementary contribution” means a voluntary payment, in addition to a special contribution, intended to liquidate an initial unfunded liability or experience deficiency;

(g)  “current service” means service during the current fiscal year of the plan;

(h)  “money purchase plan” means a plan under which each member’s retirement pension is determined according to the amount of contributions to his credit;

(i)  “unit benefit plan” means a plan under which each member’s retirement pension is determined according to a percentage of his remuneration;

(j)  “flat benefit plan” means a plan under which each member’s retirement pension is a fixed amount determined without reference to his remuneration;

(k)  “deferred profit sharing pension plan” means a plan under which the employer’s contributions depend on the yearly profits of the business, except any employees profit sharing plan and any deferred profit sharing plan contemplated in Titles I and II of Book VII of Part I of the Taxation Act (chapter I-3);

(l)  “fully funded plan” means a plan whose assets, at any particular time, are at least equal to the commuted value of the pension benefits, other benefits and rights of refund with respect to the members’ service prior to that time;

(m)  “provisionally funded plan” means a plan that has not assets sufficient to make it fully funded but has made provision to liquidate the initial unfunded liability or experience deficiency, in accordance with this Regulation;

(n)  “amortization period” means a period described in section 45;

(o)  “investment fund” means a fund:

i.  in which the assets of an uninsured plan are deposited;

ii.  that is managed by a company authorized for that purpose by its deed of incorporation and qualified to carry on business in Québec and issue securities therein; and

iii.  in which the assets of a plan may in no case be incorporated into or combined with other assets of the company or corporation;

(p)  “pooled fund” means an investment fund in which the deposited assets of a plan lose their specific identity;

(q)  “segregated fund” means an investment fund in which the deposited assets of a plan retain their specific identity.

R.R.Q., 1981, c. R-17, r. 1, s. 1; O.C. 377-84, s. 1.

2. If a parity committee established under the Act respecting collective agreement decrees (chapter D-2) carries out any of the employer’s and retirement committee’s obligations in any matter relating to a plan established by decree, the employer and the retirement committee are freed from such obligations.

R.R.Q., 1981, c. R-17, r. 1, s. 2.

3. The calendar year is the fiscal year of the plan, unless otherwise determined in the plan.

Without the approval of the Board, the fiscal year of a plan shall not exceed 12 months.

R.R.Q., 1981, c. R-17, r. 1, s. 3.

4. The physical or mental disability for which a plan may, within the meaning of paragraph b of section 38 of the Act, allow a member to replace the deferred annuity by a payment or a series of payments, is disability of such a nature as to considerably shorten his life expectancy. This definition does not apply to the replacement of the deferred annuity by a disability life annuity.

R.R.Q., 1981, c. R-17, r. 1, s. 4.

5. The transfer of a pension credit arising from section 31 of the Act, to the administrator, insurer or trustee of another plan, or to a registered retirement savings plan, shall not be made unless such pension credit is administered as a deferred annuity within the meaning of section 31 of the Act.

R.R.Q., 1981, c. R-17, r. 1, s. 5.

6. Every member of a plan who wants to take cognizance of the provisions of such plan at the office of the Board or obtain a copy of them shall file an affidavit or a solemn declaration attesting that he is a member of that plan.

The mandatory of a member must produce such an affidavit signed by the member and a written document signed by the latter establishing the mandate, except where the mandate is presumed.

The member or his mandatory may take cognizance of the provisions of the plan during the normal office hours of the Board.

The remittance of a fee in the amount of 5 $ shall be made with the request for a copy of the provisions of a plan.

R.R.Q., 1981, c. R-17, r. 1, s. 6.

7. The following documents may form the subject of an application contemplated in the second paragraph of section 25 of the Act:

(a)  the provisions of the plan and the amendments thereof;

(b)  the 2 most recent documents of each of the following categories:

i.  the returns contemplated in the first paragraph of section 15;

ii.  the declaration contemplated in section 16;

iii.  the lists and financial statements contemplated in section 17;

(c)  the correspondence exchanged, during the 2 years preceding the application, between the Board and the administrator of the plan, excepting the correspondence pertaining to a member of the plan or to a beneficiary thereunder.

R.R.Q., 1981, c. R-17, r. 1, s. 7.

8. (1)  Within 60 days after the administrator of a plan has been notified that a member of such plan has died, become disabled or terminated his employment or his membership in the plan, the administrator shall provide the member, or his assigns as the case may be, with a statement indicating:

(a)  the total of the contributions that the member was required to pay together with the amount of interest accrued thereon;

(b)  the total of the voluntary additional contributions paid by the member together with the amount of interest accrued thereon;

(c)  the total of the contributions paid by the employer on behalf of the member, where individually allocated to such member, together with the amount of interest accrued thereon;

(d)  the percentage of the contributions paid by the employer to which the member would become entitled assuming that he had terminated, on the date of the statement, his employment or his membership in the plan;

(e)  the annual amount of the pension accrued to the date of the statement and payable to the member at normal retirement age under:

i.  a unit benefit plan and a flat benefit plan;

ii.  a money purchase plan under which the retirement pension is purchased annually;

(f)  the percentage of funding of the plan as a whole as determined by the last returns required under section 15, in the case of a plan contemplated in paragraph e;

(g)  the yearly amount of any pension and the amount of any other benefit that would become payable to the member of the plan, to his assigns or to the designated beneficiary, assuming that the member had, on the date of the statement, become disabled, died or terminated his employment or his membership in the plan;

(h)  the beneficiary of any pension or benefit payable on the death of the member.

(2)  The above statement shall indicate:

(a)  that the pensions and other benefits payable under the plan shall be reduced by any amount payable under a public pension plan contemplated in section 9, where the plan provides for such reduction;

(b)  the name of such public pension plan that so reduces pensions or other benefits payable under the plan.

(3)  Furthermore, the administrator of the plan shall provide every member of that plan with a statement containing the information contemplated in this section within 180 days of the date on which the returns contemplated in section 15 must be prepared.

(4)  Where a member of a plan has terminated his employment, the administrator of such plan shall comply with the provisions of subsection 3 only upon written application made by the member or his mandatary. The administrator shall so comply within 30 days after receiving such application or within the time mentioned in subsection 3.

R.R.Q., 1981, c. R-17, r. 1, s. 8.

9. For the purposes of section 30 of the Act, the Québec Pension Plan, the Canada Pension Plan, the Old Age Security Act (R.S.C., 1985, c. O-9) and any comprehensive plan for the payment of compensation benefits in respect of injuries suffered in the course of employment or in respect of industrial diseases, enacted by the Parliament of Canada or by a province of Canada, shall be deemed to be public pension plans.

R.R.Q., 1981, c. R-17, r. 1, s. 9.

DIVISION IA SALARY OR WAGES FOR COMPENSATION PURPOSES

O.C. 2708-82, s. 1.

9.1. For the application of section 44.2 of the Act, the following 2 periods are established:

(a)  the 12-month period immediately preceding the day when, for the first time during a delay in the payment of a pension, a reduced salary or reduced wages become payable to an employee; and

(b)  the 12-month period beginning on the day when the employee receives a reduction in salary or wages for which he applies for compensation.

O.C. 2708-82, s. 1.

9.2. The salary or wages of an employee consist of the basic remuneration in current money paid to the employee by the employer in return for work performed by the employee.

O.C. 2708-82, s. 1.

9.3. An employee’s salary or wages for the period established in paragraph a of section 9.1 correspond to the salary or wages paid to the employee for his last pay period before a reduction:

(a)  entirely included in the established period;

(b)  during which the employee worked the time provided for in his contract of lease and hire of personal services or in accordance with the requirements of his office; and

(c)  for which the employee has received the full salary or wages prescribed for that pay period.

The salary or wages prescribed in the first paragraph must be adjusted to a yearly basis by multiplying the figure by the number of times the employee’s pay period is contained in the period established in paragraph a of section 9.1.

O.C. 2708-82, s. 1.

9.4. An employee’s salary or wages for the period established in paragraph b of section 9.1 correspond to the salary or wages payable to the employee for his first pay period after a reduction:

(a)  entirely included in the established period;

(b)  during which the employee works the time provided for in his contract of lease and hire of personal services or in accordance with the requirements of his office; and

(c)  for which the employee receives the full salary prescribed for that pay period.

The salary or wages prescribed in the first paragraph must be adjusted to a yearly basis by multiplying the figure by the number of times the employee’s pay period is contained in the period established in paragraph b of section 9.1.

O.C. 2708-82, s. 1.

9.5. To the salary or wages obtained in accordance with section 9.4 must be added 12 times the amount obtained from a retirement pension under the Act respecting the Québec Pension Plan (chapter R-9) or the Canada Pension Plan (R.S.C., 1985, c. C-8) or from a pension under the Old Age Security Act (R.S.C., 1985, c. O-9), received by the employee at the time of the first reduction in his salary or wages incurred during the delay when he was the beneficiary of one of the aforementioned pensions and for which he applies for compensation.

O.C. 2708-82, s. 1.

DIVISION II REGISTRATION AND RETURNS

10. An application for registration of a plan must be made on the prescribed form and contain the following information:

(a)  the identification of the employer;

(b)  the nature of the business;

(c)  the name of the plan;

(d)  the statistics concerning membership in the plan;

(e)  the names and addresses of the administrators;

(f)  the funding medium.

R.R.Q., 1981, c. R-17, r. 1, s. 10.

11. Each application for registration must be completed by a report which shall include:

(a)  the estimated cost of pension benefits, other benefits and rights of refund in respect to current service;

(b)  the rule for computing the cost of pension benefits, other benefits and rights of refund in respect of current service, for each subsequent year up to the date of the next return;

(c)  the initial unfunded liability or the surplus if any;

(d)  the special contributions required to liquidate the initial unfunded liability in accordance with the standards of solvency;

(e)  the date of the last actuarial report;

(f)  the actuarial method and assumptions used for the valuation of the plan.

R.R.Q., 1981, c. R-17, r. 1, s. 11.

12. Every plan submitted for registration shall, in particular, contain written provisions respecting:

(a)  the qualification requirements;

(b)  the financial arrangements to ensure full funding of pension benefits, other benefits and rights of refund;

(c)  the benefit formulae;

(d)  the vesting provisions;

(e)  the determination of normal retirement age;

(f)  the management of the retirement fund, if the plan is uninsured.

R.R.Q., 1981, c. R-17, r. 1, s. 12.

13. The application for registration of an uninsured plan must be filed together with the financial statement thereof for the preceding fiscal year, certified by the administrator or an accountant. The financial statement shall be accompanied by a detailed list of the investments, by classes, showing both their book value and their market value.

R.R.Q., 1981, c. R-17, r. 1, s. 13.

14. Every application for registration shall be accompanied by a certified copy of the trust deed, insurance contract, agreement, regulation or other document containing the provisions of the plan.

R.R.Q., 1981, c. R-17, r. 1, s. 14.

15. Within 3 years from the date of registration, and thereafter at intervals of 3 years or less, the administrator of a registered plan shall prepare returns which shall include:

(a)  the estimated cost of pension benefits, other benefits and rights of refund in respect of current service for the year following the date of the return;

(b)  the rule for computing the cost of pension benefits, other benefits and rights of refund in respect of current service for each subsequent year up to the date of the next return;

(c)  the initial unfunded liability;

(d)  the experience deficiency;

(e)  the surplus;

(f)  the special contributions required to liquidate the experience deficiency in accordance with the standards of solvency;

(g)  the special contributions required to liquidate the initial unfunded liability in accordance with the standards of solvency;

(h)  in the case of an uninsured plan, the actuarial method and assumptions used for the valuation of the plan.

The returns mentioned in the first paragraph shall be submitted to the Board within 180 days of the date on which they have to be prepared.

The Board may at any time require from an administrator the filing of a return in addition to those mentioned above if it considers such a return necessary to verify whether or not the requirements of the Act and Regulation have been complied with.

Where the Board is not satisfied that a report has been prepared using assumptions which are adequate and appropriate and methods consistent with the sound principles established by precedence or common usage within the actuarial profession, the report shall be amended so as to be acceptable to the Board.

The Board may, if judged necessary, prescribe a form on which the returns mentioned in the present section must be furnished.

R.R.Q., 1981, c. R-17, r. 1, s. 15.

16. For the renewal of the registration, the administrator of a plan shall furnish each year to the Board, within the 6 month period following the end of the fiscal year, a declaration on the prescribed form containing the following information:

(a)  identification of the employer;

(b)  the name of the plan;

(c)  the contributions paid in the course of the financial year;

(d)  the statistics concerning membership in the plan.

On this declaration the administrator shall also certify that all contributions required during the fiscal year have been made.

R.R.Q., 1981, c. R-17, r. 1, s. 16.

17. Within 6 months of the end of each fiscal year, the administrator of an uninsured plan shall submit to the Board:

(a)  a detailed list of investments by class with an indication of their book value and their market value;

(b)  financial statements audited by an accountant.

The financial statements shall be prepared on an accrual basis and shall show in particular for the year in question:

i.  the amount of the employer’s contribution for current service;

ii.  the total amount of all the special contributions;

iii.  the total amount of employees’ contributions; and

iv.  the total amount of voluntary additional contributions.

R.R.Q., 1981, c. R-17, r. 1, s. 17; O.C. 354-85, s. 1.

18. The returns mentioned in section 11 and in paragraphs a, b, c, d, e, f, g and h of section 15 shall be certified by an actuary.

Nevertheless, an accountant or a representative authorized by the insurer of the plan, by the trust company acting as administrator thereof, or by the Minister of Labour of Canada, as the case may be, may certify the returns in respect of:

(a)  an insured plan;

(b)  a money purchase plan under which the cost of all benefits is paid to an insurer on or before retirement.

R.R.Q., 1981, c. R-17, r. 1, s. 18.

19. With the approval of the Board, a plan may exclude, from the amount of the deferred annuity prescribed in section 31 of the Act, any make-up annuity provided for the payment of a minimum pension.

R.R.Q., 1981, c. R-17, r. 1, s. 19.

20. At the request of one of the parties, the Board may give an opinion on the provisions concerning a plan as embodied in a draft collective labour agreement.

R.R.Q., 1981, c. R-17, r. 1, s. 20.

21. Where the greater number of the members of a plan are employed in a place where such plan is subject to similar legislation, the said plan is exempt from registration and inspection. To ascertain where the greater number of members are employed, members not employed in this Province or in that place shall not be counted.

R.R.Q., 1981, c. R-17, r. 1, s. 21.

22. The application for registration and the certificate for renewal thereof must be accompanied by payment of the fee.

The amount of the fee is established according to the number of the plan’s members employed in the Province and in a place where the said plan is subject to similar legislation.

The fee is 5 $ per member with a minimum of 100 $ and a maximum of 2 500 $ for any plan.

Notwithstanding the third paragraph, in the case of the certificate for renewal of the registration in respect of a fiscal year ending prior to 1 April 1978, the fee is 1$ per member with a minimum of 20 $ and a maximum of 200 $ for any plan.

R.R.Q., 1981, c. R-17, r. 1, s. 22.

23. Any plan submitted for registration must have a name by which it is designated. Such name must not be liable to be confused with that of another plan. Where a plan is established after 1 January 1966, such name shall include the expression “pension plan” or “régime de rentes” together with the name of the employer or association.

Where the plan applies to only one class of employees, the name of the plan may include the identification of such class.

Where the plan requires the establishment of a retirement fund, such fund shall be designated in the same manner.

R.R.Q., 1981, c. R-17, r. 1, s. 23.

24. Every application for review of the Board’s refusal to register a plan under section 13 of the Act shall be made in writing and briefly state the reasons therefore.

Such application shall be sent to the secretary of the Board.

R.R.Q., 1981, c. R-17, r. 1, s. 24.

25. Upon receipt of an application for review, the Board shall inform the applicant of the date, place and time of the hearing.

R.R.Q., 1981, c. R-17, r. 1, s. 25.

26. Where the Board requires the amendment of a return, the filing of an additional return or supplementary information, the person to whom such request is made shall comply within 30 days or within such other additional time the Board may grant.

R.R.Q., 1981, c. R-17, r. 1, s. 26.

DIVISION III AMENDMENTS

27. Without restricting the scope of section 9 of the Act, any change concerning the following matters is an amendment within the meaning of the Act, even if such amendment is not provided for in the plan:

(a)  the formula for regular or special contributions;

(b)  the cessation of contributions;

(c)  the classes of persons who may be covered;

(d)  the conditions under which the right of benefits is vested;

(e)  the basis for computing the benefits or pensions;

(f)  the classes of permissible investments;

(g)  the duties of the administrator or of the retirement committee;

(h)  an agreement pertaining to the transfer of pension credits;

(i)  the replacement of the deferred annuity in the cases provided for in section 38 of the Act;

(j)  the name of the plan or the substitution of the employer.

R.R.Q., 1981, c. R-17, r. 1, s. 27.

28. The return contemplated in paragraphs a, b, c, d and f of section 11 shall accompany any application for approval of an amendment concerning one of the matters referred to in these paragraphs. This report shall state the cost of the amendment submitted for approval.

R.R.Q., 1981, c. R-17, r. 1, s. 28.

29. If an employer ceases to make contributions to a plan after 31 December 1965, due to the adoption of a new plan, he shall not be deemed to have ceased to make the contributions within the meaning of section 40 of the Act. The pension benefits, other benefits and rights of refund under the former plan shall, in such case, be deemed to be the pension benefits, other benefits and rights of refund in respect of the service of members before the date of such cessation, even if the assets or liabilities of the former plan are not merged with those of the new plan.

R.R.Q., 1981, c. R-17, r. 1, s. 29.

30. Where the Board considers that there has been a total or partial termination of a plan, and it has determined the date thereof, the administrator of the plan shall within 60 days of receipt of a request from the Board to that effect send it a termination report concerning all the members of the plan covered by the termination.

R.R.Q., 1981, c. R-17, r. 1, s. 30; O.C. 354-85, s. 2.

30.1. In the case of an uninsured plan, the termination report prescribed by section 30 shall contain:

(a)  the amount of the employer’s contributions required for the period elapsed since the end of the last fiscal year of the plan to the termination date and the amount of such contributions paid during that period;

(b)  the amount of employees’ contributions required for the period elapsed since the end of the last fiscal year of the plan to the termination date and the amount of such contributions paid during that period;

(c)  the value, at the termination date, of the assets of the plan and a description of the method used to calculate that value;

(d)  the pension credits of all the members covered, calculated at the termination date, taking into account section 34, and a description of the method used to calculate them;

(e)  such pension credits reduced in accordance with section 35, and a description of the method used for the reduction;

(f)  a recommendation concerning the manner of realizing the assets of the plan, or the part of the assets involved, and the time required to do so;

(g)  a recommendation concerning the manner of paying the pension credits in question according to the priority selected and the time required to do so;

(h)  in the case of total termination, a statement of the sums of money available under the plan but not required to pay pension credits, and the manner in which they should be used.

O.C. 354-85, s. 2.

30.2. In the case of an insured plan, the termination report prescribed by section 30 shall contain:

(a)  the amount of the employer’s contributions required for the period elapsed since the end of the last fiscal year of the plan to the termination date, and confirmation by the insurer that they have been paid;

(b)  the amount of employees’ contributions required for the period elapsed since the end of the last fiscal year of the plan to the date, of termination, and confirmation by the insurer that they have been paid;

(c)  a statement of pension credits of all the members covered, calculated at the termination date, taking into account section 34;

(d)  a description of the manner in which the pension credits in question will be paid;

(e)  in the case of a total termination, a statement of the sums of money available under the plan but not required to pay pension credits, and the manner in which they should be used.

O.C. 354-85, s. 2.

31. The following persons are qualified to prepare a termination report:

(a)  an actuary, in all cases;

(b)  an accountant, in the case of a money-purchase pension plan;

(c)  an authorized representative of the insurer of the plan, in the case of an insured plan.

R.R.Q., 1981, c. R-17, r. 1, s. 31; O.C. 354-85, s. 2.

32. Where the Board is not satisfied that a termination report has been prepared using assumptions which are adequate and appropriate and methods consistent with the sound principles established by precedent or common usage within the actuarial profession, the report shall be amended so as to be acceptable to the Board.

In addition to a termination report, the Board may require from the administrator of a plan any supplementary report if it considers it necessary to verify if the requirements of the Act and the Regulation have been complied with. The administrator to whom such a request is made shall comply within 30 days or within such other additional time the Board may grant.

R.R.Q., 1981, c. R-17, r. 1, s. 32.

33. Where an employer ceases to contribute with respect to some or all of the members of a plan and the Board considers the plan terminated in whole or in part, the administrator of the plan may, with the Board’s authorization, make the payments on account of a pension in payment as they become due as well as those of a pension the first payment of which becomes due after the contributions have ceased.

R.R.Q., 1981, c. R-17, r. 1, s. 33.

34. Upon the termination of a plan, a pension credit is determined having regard to the increase contemplated in the second paragraph of section 43 of the Act.

R.R.Q., 1981, c. R-17, r. 1, s. 34.

35. The reduction of a pension credit contemplated in section 42 of the Act shall be equal to the amount obtained in multiplying the value determined according to the second paragraph of this section by the proportion established according to the third paragraph of this section.

The total value of the reduction of the pension credits having created in initial unfunded liability not fully funded on termination date is equal to the lesser of:

(a)  the difference on termination date between the aggregate, in respect of all members and beneficiaries, of the pension credits calculated taking into account section 34 and the market value of the total assets;

(b)  the actual value on termination date of the special contributions that would have been payable with respect to the initial unfunded liability had the plan not terminated.

The proportion to be used for the reduction of a given pension credit is the ratio that the part of such pension credit which has created the initial unfunded liability bears to the aggregate of all parts of pension credits which have created such initial unfunded liability.

The actual value on termination date of the benefit which has created the initial unfunded liability is the part of pension credit mentioned in the preceding paragraph.

R.R.Q., 1981, c. R-17, r. 1, s. 35.

36. If the plan provides for no order of priority of payment of pension credits in case of termination, or if that order does not comply with the standards, this payment shall, subject to section 41 of the Act, be made by classes in the following order of priority:

(a)  the pension credits relating to pensions or parts of pensions arising from the contributions made by former or present employees, other than those contemplated in section 41 of the Act;

(b)  the pension credits corresponding to the balance of the pension credits reduced according to section 35 relating to pensions in payment, to pensions of employees having opted for deferred retirement and to deferred pensions of former or present employees, the amount of which has been calculated when they ceased contributing prior to the plan’s termination date, such balance being obtained by subtracting from the said reduced pension credits the aggregate of the pension credits contemplated in section 41 of the Act and those contemplated in subparagraph a;

(c)  the pension credits corresponding to the balance of the pension credits reduced according to section 35 relating to the deferred annuity to which the present employees, not covered by subparagraph b would be entitled under the plan if they terminated their service on the plan’s termination date, such balance being obtained by subtracting from the said reduced pension credits contemplated in section 41 of the Act and those contemplated in subparagraph a;

(d)  in the case of employees, the pension credits or the parts of the pension credits reduced according to section 35 and which are not contemplated in section 41 of the Act or in subparagraphs a to c.

Should the remaining assets be insufficient to meet the obligations of a class, after provision has been made for the payment of pension credits in one or more of the classes in the order prescribed in the first paragraph, each employee or beneficiary in the class is entitled to his proportionate share of his pension credit.

After provision has been made for the payment of the pension credits of all classes in the order prescribed by the first paragraph, the remaining assets, if any, shall be used to revise the reduction of pension credits made according to section 35.

R.R.Q., 1981, c. R-17, r. 1, s. 36.

37. When a plan is terminated in whole or in part, the pensions in payment which are concerned by the termination shall be fully insured or guaranteed either by the Government of Canada or that of any province, or by an insurance company or association registered in the Province.

R.R.Q., 1981, c. R-17, r. 1, s. 37.

38. When a plan is terminated in whole, the administrator thereof shall distribute to the members the unused assets according to their proportionate shares of the fund, except where the plan provides that such assets shall revert to the employer.

R.R.Q., 1981, c. R-17, r. 1, s. 38.

DIVISION IV CONTRIBUTIONS AND BENEFITS

39. The formula for the pension benefit for each year of future service shall be uniform. The Board, however, may approve any variable formula it deems reasonable.

R.R.Q., 1981, c. R-17, r. 1, s. 39.

40. Where a plan is insured by level premium individual contracts issued prior to the qualification date, the amount of the deferred annuity mentioned in the first paragraph of section 32 of the Act may be equal to the paid up annuity under the contract with respect to contributions made since the qualification date, provided that the special contributions required for the constitution of such annuity have been made or shall continue to be made.

R.R.Q., 1981, c. R-17, r. 1, s. 40.

41. A unit benefit plan or a flat benefit plan of which the method of calculating contributions determines beforehand the global amount of the latter respecting current service shall not be registered, nor its registration maintained, except upon the following conditions:

(a)  the return contemplated in section 11 or in subparagraph a to h of the first paragraph of section 15 is prepared by an actuary;

(b)  the total assets of the plan, including the actual value of the special contributions respecting an initial unfunded liability, if any, are at least equal to the aggregate of the pension credits on the date of the return contemplated in section 11 or in subparagraphs a to h of the first paragraph of section 15;

(c)  any liability determined on the date of the return contemplated in subparagraphs a to h of the first paragraph of section 15 and arising from the difference between the aggregate of the pension credits and the total assets of the plan, including the actual value of the special contributions respecting an initial unfunded liability, if any, is funded before the date of the next return contemplated in subparagraphs a to h of the first paragraph of section 15;

(d)  the amounts of benefits under the provisions of the plan in force during any period of time elapsed before the date on any return contemplated in subparagraphs a to h of the first paragraph of section 15 are not reduced.

R.R.Q., 1981, c. R-17, r. 1, s. 41.

DIVISION V SOLVENCY

42. Every plan shall contain provisions for funding of pension benefits, other benefits and rights of refund.

R.R.Q., 1981, c. R-17, r. 1, s. 42.

43. Where the valuation of a plan that is not terminated is to take place on a given date, the method and the assumptions on which the valuation is based shall assume that the plan is to be of indefinite duration.

One of the assumptions contemplated in the first paragraph shall include the projection of salaries up to the normal retirement age, in the case of a plan under which the amount of benefits in respect of a given year depends on the subsequent evolution of salaries.

R.R.Q., 1981, c. R-17, r. 1, s. 43.

44. Only a fully or provisionally funded plan may be certified to be in compliance with the standards of solvency.

R.R.Q., 1981, c. R-17, r. 1, s. 44.

45. The amortization period for an initial unfunded liability existing on 1 January 1966, is the period terminating on 31 December 1990.

The amortization period for an initial unfunded liability other than that contemplated in the first paragraph is the period terminating on 31 December 1990 or 15 years after the date when such liability was determined.

The amortization period for an experience deficiency is the period terminating 5 years after the date when such deficiency was determined.

Where an experience deficiency is determined by the valuation of a plan contemplated in section 57, the employer may elect to avail himself of the provisions of the second paragraph or those of Division VI, except where the actuary making the valuation recommends that the provisions of the second paragraph be followed.

R.R.Q., 1981, c. R-17, r. 1, s. 45.

46. The amount of any initial unfunded liability or experience deficiency shall be funded by means of special contributions spread over a period not exceeding the amortization period. The special contribution in any year shall not be less than the annual amount required to liquidate the remaining initial unfunded liability or experience deficiency during the remainder of the amortization period.

If a fiscal year is less than 12 months, or more than 12 months, the amount of the special contribution is proportional to the number of months.

In the case of a plan administered or fully guaranteed by the city of Montréal, no special contribution in respect of an initial unfunded liability existing at the time of registration shall be required before the termination of the city’s fiscal year 1968/1969.

In the case of a plan administered or fully guaranteed by the city of Québec, no special contribution in respect of an initial unfunded liability existing at the time of registration shall be required before the termination of the city’s fiscal year 1970/1971.

R.R.Q., 1981, c. R-17, r. 1, s. 46.

47. The amount of any initial unfunded liability or experience deficiency may be funded by means of one or more special supplementary contributions. The effect of these contributions is to reduce thereafter the annual amount required to liquidate the initial unfunded liability or experience deficiency. These contributions may also be in stead of the special contributions to come required by section 46 up to the amount of these special supplementary contributions.

R.R.Q., 1981, c. R-17, r. 1, s. 47.

48. During each fiscal year, the employer shall pay contributions which, together with the employees’ contributions, will cover the cost of pension benefits, other benefits and rights of refund for current service.

R.R.Q., 1981, c. R-17, r. 1, s. 48.

49. Subject to the second paragraph, the contributions contemplated in sections 46 and 48 shall be paid by the employer, during each month included in any fiscal year, at the rate of 1/12 of their annual amount.

Where the annual amount of a contribution is not known at the beginning of any fiscal year, this amount shall be paid as soon as it is known:

(a)  by means of an amount, paid without delay, representing the number of twelfths of the annual amount corresponding to the number of months in whole or in part elapsed since the beginning of the fiscal year; and

(b)  at the rate of 1/12 of the annual amount, paid during each remaining month in the fiscal year.

The first 2 paragraphs apply, mutatis mutandis to any fiscal year that is less than 12 months or more than 12 months.

R.R.Q., 1981, c. R-17, r. 1, s. 49.

50. The employees’ contributions, together with voluntary additional contributions, shall be paid by the employer into the retirement fund or, if such is the case, to the insurer at the latest during the month following the month in which they were collected by the employer.

R.R.Q., 1981, c. R-17, r. 1, s. 50.

51. Any insured plan established before the qualification date and which is funded, in respect of each member of the plan, by means of level, premiums over a period not exceeding retirement age, is deemed to meet the requirements of section 46 on the qualification date.

R.R.Q., 1981, c. R-17, r. 1, s. 51.

52. Any surplus determined by an actuarial valuation may be used to reduce the contributions required under the plan.

Upon application of this surplus, the administrator of a plan shall furnish to the Board the returns mentioned in section 15.

R.R.Q., 1981, c. R-17, r. 1, s. 52.

53. A plan registered under similar legislation may comply with the standards of solvency of such similar legislation provided that the initial unfunded liability take into account the service of the plan’s members employed in this Province and in a place where such plan is subject to similar legislation.

R.R.Q., 1981, c. R-17, r. 1, s. 53.

54. In the case of a plan established by an agent of her Majesty in right of the Province, the special contributions in respect of an initial unfunded liability existing on 1 January 1966 may be limited to the annual amount required to prevent any increase in such liability.

This section applies to a plan administered or fully guaranteed by the city of Montréal for its employees.

R.R.Q., 1981, c. R-17, r. 1, s. 54.

55. No administrator of a plan shall irrevocably transfer or take out of the fund the amounts required to pay a pension credit except inasmuch as the contributions required to constitute it have been paid into the fund.

Where special contributions are not specifically allocated under the plan to fund a given pension credit, the administrator shall, in order to determine the measure in which the contributions required for the funding of that pension credit have been paid, allocate in respect of the member concerned a part of the unpaid balance of any initial unfunded liability. That part shall be obtained by multiplying the unpaid balance of any initial unfunded liability by the proportion existing when the said initial unfunded liability was created between that part of the pension credit which contributed to the creation of such initial unfunded liability and the total amount of the latter.

The part of the unpaid balance of any initial unfunded liability so obtained shall be that part of a pension credit for which the required contributions shall be deemed not to have been paid.

Nothing in this section shall forbid an administrator from paying out of the fund the periodic amounts payable under the plan as they become due.

R.R.Q., 1981, c. R-17, r. 1, s. 55.

DIVISION VI AMORTIZATION OF CERTAIN EXPERIENCE DEFICIENCIES

56. In this Division, unless the context indicates otherwise,

(a)  “special deficit” means the amount by which the liabilities of a plan calculated in accordance with section 59 exceed its assets calculated in accordance with section 60;

(b)  “special balance” means on the date of a plan’s valuation, the sum of the balances of all experience deficiencies, or of all parts of such deficiencies, previously determined and the amortization period of which was not to exceed 5 years;

(c)  “final pay plan” means unit benefit plan in which the retirement pension is calculated according to the salary of a determined period in the final years of service, and the number of credited years of service;

(d)  “average best earnings plan” means unit benefit plan in which the retirement pension is calculated according to the highest salary earned during a determined period in the career and to the number of credited years of service.

R.R.Q., 1981, c. R-17, r. 1, s. 56.

57. This Division applies only to a final pay plan and to an average best earnings plan.

R.R.Q., 1981, c. R-17, r. 1, s. 57.

58. Where an experience deficiency is determined by a plan’s valuation, that deficiency may be amortized in the manner and under the conditions fixed by sections 59 to 63.

R.R.Q., 1981, c. R-17, r. 1, s. 58.

59. In order to determine a plan’s liabilities for the purposes of this Division, a pension credit shall be equal to the value obtained in accordance with the following paragraphs.

First shall be determined the amount of the pension due to a person under the plan or which would be due to him were that person, on valuation date, deemed to be entitled to that pension and were the salary, on which the amount of that pension is based, deemed to be the best annual salary known on that date.

Next there shall be assigned to the pension, the amount of which has been determined in accordance with the second paragraph, an actual value by using the accrued benefit method and by using assumptions consistent with those used for the valuation made in accordance with section 43 and that must be strengthened, if need be, depending on the yield and the realizable value of the assets of the plan.

Furthermore, where the plan provides that the pension payable at normal retirement age may be converted into a disability pension or a death benefit, the pension credit shall be determined having regard to that affect.

However if, assuming that an employee terminates his employment or his membership in the plan on valuation date, it appears that his pension credit provided by the plan in such a case exceeds the one obtained according to the 3 preceding paragraphs, then the greater value is to be retained.

R.R.Q., 1981, c. R-17, r. 1, s. 59.

60. When determining the assets of a plan for the purposes of this Division, no unrealized gain, dividend or interest shall be taken into account.

The assets may include the actual value of the future special contributions in respect of any initial unfunded liability, that value being the one which is deemed adequate by the actuary and which shall not exceed the value that he would obtain by using as discount rate for the future special contributions the interest rate used when valuing the plan in accordance with section 43.

R.R.Q., 1981, c. R-17, r. 1, s. 60.

61. Where a plan’s special deficit is equal to or less than its special balance, the amortization period for an experience deficiency is the period terminating 15 years after the date when such deficiency was determined.

R.R.Q., 1981, c. R-17, r. 1, s. 61.

62. Where a plan’s special deficit exceeds its special balance, the amount by which the special deficit exceeds the special balance shall be paid by means of not more than 3 annual special contributions, and the amortization period for the experience deficiency reduced by that excess is the period terminating 15 years after the date when such deficiency was determined.

R.R.Q., 1981, c. R-17, r. 1, s. 62.

63. When an employer elects to avail himself of this Division, the administrator of the plan shall file with the Board a copy of a recommendation made by an actuary with respect to the option contemplated in section 45, a certificate signed by that actuary with respect to any special deficit or special balance, if existing, and a report prepared by the same actuary to justify his certificate.

R.R.Q., 1981, c. R-17, r. 1, s. 63.

DIVISION VII INVESTMENTS

64. As they are collected and until they are invested, all contributions to a plan must be deposited on demand in a special account, in the name of the plan, in a bank, in a trust company or a savings and credit union which is a registered institution within the meaning of the Deposit Insurance Act (chapter A-26).

R.R.Q., 1981, c. R-17, r. 1, s. 64.

65. A plan may acquire and hold bonds or other securities issued or guaranteed by:

(a)  Québec or another province of Canada;

(b)  Canada;

(c)  the United States of America or any state of that country;

(d)  any country in which the employer is carrying on business provided that the total investment under this subparagraph shall not exceed 5% of the book value of the total assets of the plan, or such other percentage as the Board may approve in cases where the aggregate of the pension credits in respect of employees resident outside Canada exceeds 5% of the book value of the total assets of the plan;

(e)  the International Bank for Reconstruction and Development, the Inter-American Development Bank and the Asian Development Bank;

(f)  a municipal or school corporation in Canada.

R.R.Q., 1981, c. R-17, r. 1, s. 65.

66. A plan may acquire and hold:

(a)  bonds or other securities issued by a public authority having as its object the operation of a public service and entitled to impose a tariff for that service;

(b)  bonds or other securities secured by the transfer to a trustee of an undertaking of Québec, any other Canadian province or Canada to pay each year sufficient subsidies to meet the interest and principal upon their respective maturities.

R.R.Q., 1981, c. R-17, r. 1, s. 66.

67. A plan may acquire and hold bonds or other securities issued by a corporation, a cooperative association or a cooperative agricultural association:

(a)  if they are fully secured by real estate or by shares, preferred shares or bonds or other securities allowable for investment by the plan under this Division;

(b)  if they are fully secured by equipment of the corporation of the cooperative association or of the cooperative agricultural association, and if one or the other, as the case may be, has paid in full the interest on its other debts during the 10 years preceding the acquisition of the bonds or other securities by the plan;

(c)  if the common or preferred shares of the corporation or of the cooperative agricultural association or the shares or preferred shares of the cooperative association are allowable for investment by the plan under section 68 or the first paragraph of section 69;

(d)  if they are fully secured by a corporation or a cooperative agricultural association whose common or preferred shares are allowable for investment by the plan under section 68 or the first paragraph of section 69;

(e)  if they are fully secured by a cooperative agricultural association whose shares or preferred shares are allowable for investment by the plan under section 68 or the first paragraph of section 69.

R.R.Q., 1981, c. R-17, r. 1, s. 67.

68. A plan may acquire and hold fully paid preferred shares of a corporation or of a cooperative agricultural association if during each of the 5 years preceding the acquisitions, one or the other, as the case may be, has:

(a)  paid on its preferred shares a dividend or interest equal to at least the weighted average of the annual dividend rates or interests specified on its preferred shares; or

(b)  obtained on its common shares the yield provided for in the first paragraph of section 69.

A plan may acquire and hold fully paid preferred shares of a cooperative association if during each of the 5 years preceding the acquisition, the latter has:

(a)  paid interest on its preferred shares or obtained a yield on them equal to at least the weighted average of the annual rates of interest or yield specified on its preferred shares; or

(b)  obtained on its shares the yield provided for in the first paragraph of section 69.

R.R.Q., 1981, c. R-17, r. 1, s. 68.

69. A plan may acquire and hold fully paid common shares of a corporation or of a cooperative agricultural association or fully paid shares of a cooperative association or of a savings and credit union if one or the other, as the case may be, has during a period of 5 years that ended less than one year before the date of acquisition and during at least 4 of those 5 years, including the last year:

(a)  obtained on its common shares or shares a net yield of at least 4% of the average value at which they were entered in its capital account during the year in which it has made earnings available for payment of dividends or interests; or

(b)  paid on its common shares or shares a dividend or interest of at least 4% of the average value at which they were entered in its capital account during the year in which it has paid a dividend or interest.

No plan shall hold more than 30% of the common shares or of a class of common shares of one corporation or cooperative agricultural association or of the shares or of a class of shares of one cooperative association or savings and credit union.

For the purposes of this section, where a corporation, a cooperative agricultural association, a cooperative association or a savings and credit union holds more than 50% of the common shares or shares of another corporation, association or union, and where it accounts are presented to its shareholders or members in consolidated form, the yield must be computed on the basis of these accounts. Similarly, in the case of a corporation, association or union continuing or formed as a result of an amalgamation, the yield is determined, for any relevant period prior to the date of amalgamation, as though the consolidated accounts of the amalgamated corporations, associations or unions had been established.

R.R.Q., 1981, c. R-17, r. 1, s. 69.

70. Subject to the second paragraph of section 69, a plan may acquire and hold fully paid shares of:

(a)  a loan company designated as a mortgage investment company pursuant to section 112 of the Loan Companies Act (Canada) (R.S.C., 1985, c. L-12) or

(b)  a corporation that is incorporated by or pursuant to the laws of a province for the purpose of carrying on the business of a loan company within the meaning of the Loan Companies Act (Canada) and that, in the opinion of the Board, has powers and is subject to limitations and requirements that are the same in all essential respects as the powers conferred upon and the limitations and requirements made applicable to a mortgage investment company by the Loan Companies Act (Canada).

R.R.Q., 1981, c. R-17, r. 1, s. 70.

71. A plan may acquire and hold:

(a)  guaranteed investment certificates issued by any trust company authorized to do business in Québec if the common or preferred shares of that trust company are of such nature as to constitute for the plan an investment complying with the prescriptions of section 68 or the first paragraph of section 69;

(b)  bonds or other securities issued by any savings company holding a licence under the Act respecting trust companies and savings companies (chapter S-29.01) and a loan and savings society registered in accordance with the Loan and Investment Societies Act (chapter S-30) which has been specially approved by the Government for the application of paragraph f of article 981o of the Civil Code and the ordinary operations of which in Québec are to make loans to municipal or school corporations and fabriques or loans secured by first privilege or first hypothec on real estate situated in Québec:

(c)  securities issued by any savings and credit union incorporated under the Savings and Credit Unions Act (chapter C-4.1) and registered within the meaning of the Deposit Insurance Act (chapter A-26).

R.R.Q., 1981, c. R-17, r. 1, s. 71.

72. A plan may acquire and hold debts secured by real estate in Canada:

(a)  if payment in principal and interest is guaranteed or assured by Québec, another province of Canada or Canada;

(b)  if the amount of the debt is not more than 75% of the value of the real estate securing payment of it, less the other debts secured on the same real estate and ranking equally with or ahead of the plan’s claim; or

(c)  if the excess value of the real estate securing payment of them, over 75% of such value, less the other debts secured on the same real estate and ranking equally with or ahead of the plan’s claim, is guaranteed or assured by Québec, any province of Canada, Canada, the Canadian Mortgage and Housing Corporation, the Société d’habitation du Québec or an hypothecary insurance policy issued by an insurance company holding a licence.

R.R.Q., 1981, c. R-17, r. 1, s. 72.

73. A plan may, to secure total or partial payment of any amount owed to it, acquire the real estate which secures its payment. Nevertheless, it must dispose of the real estate so acquired within a delay of 7 years unless such delay is extended by the Board.

R.R.Q., 1981, c. R-17, r. 1, s. 73.

74. A plan may acquire and hold real estate in Canada, provided such real estate has produced, in each of the 3 preceding years, a net revenue that if continued in future years, would be sufficient to yield a reasonable interest return on the amount invested and to repay at least 85% of that amount within 40 years, or within the remaining economic lifetime of the improvements to the real estate if the latter period is shorter.

R.R.Q., 1981, c. R-17, r. 1, s. 74.

75. Notwithstanding section 74, a plan may acquire and hold real estate in Canada, a lease of which is made to or guaranteed by:

(a)  the Government of Canada or of a province or an agent of the Crown or a municipal corporation; or

(b)  a corporation or a cooperative agricultural association, the common or preferred shares of which could be, at the date of investment, authorized as investments by this Division; or

(c)  a cooperative association or savings and credit union, the shares or preferred shares of which could be, at the date of investment, authorized as investments by this Division;

provided such lease produces a net revenue sufficient to yield a reasonable interest return on the amount invested and to repay at least 85% of such amount during a 30 year period, or during the period of the lease if the latter is shorter.

R.R.Q., 1981, c. R-17, r. 1, s. 75.

76. A plan’s total investments in the real estate constituting a single undertaking shall not exceed 4% of the book value of the total assets of the plan.

R.R.Q., 1981, c. R-17, r. 1, s. 76.

77. The assets of a plan may be invested in a segregated or pooled fund or in an investment company, provided that the investments of the fund or company, as the case may be, comply with the standards of this Division..

An investment company, within the meaning of this section, is a company which cannot have debt obligations and the assets of which are at least 98% cash, investments and loans and whose income is obtained in the same proportion from investments and loans.

Section 89 does not apply to investments made under this section.

R.R.Q., 1981, c. R-17, r. 1, s. 77; O.C. 377-84, s. 2.

77.1. The assets of a plan may be invested in a real estate trust, provided that the sum of the book value of the units and shares of the real estate trust held by the plan, or in its name, and of the total liabilities of the real estate trust towards the plan do not at any time exceed 10% of the book value of the plan’s total assets.

In this section, “real estate” includes leaseholds outside Québec and “real estate trust” means a pooled or segregated fund or an investment company whose objects or main transactions consist of acquiring and holding real estate for the purpose of deriving income from it, and which, at the time the investment is made, fulfils the following conditions:

(1)  investments of the real estate trust, other than those in real estate, may only be made in compliance with the standards of this Division;

(2)  the total amount of investments and loans of the real estate trust in the same real estate does not exceed 10% of the book value of the net assets of the real estate trust;

(3)  the total liabilities of the real estate trust resulting from borrowing money, the repayment of which is not secured by real estate, do not exceed 10% of the book value of the net assets of the real estate trust; and

(4)  the total amount of investment of the real estate trust in real estate other than that acquired and held for the purpose of deriving income from it does not exceed 10% of the book value of the net assets of the real estate trust.

O.C. 377-84, s. 3.

77.2. For the purposes of sections 77 and 77.1, investments in investment companies other than those made in a pooled or segregated fund may only be made in shares of those companies. In such cases, shares must be redeemable on demand, at holder’s option, at the redemption price registered in the deed of incorporation of the company with respect to such shares.

O.C. 377-84, s. 3.

77.3. (1)  In this section, the expression “real estate corporation” means a corporation set up to acquire and hold real estate.

(2)  A plan may acquire and hold fully paid shares of a real estate corporation provided that the following conditions are observed:

(1)  the real estate corporation must restrict its activities to the purposes for which it was incorporated;

(2)  the assets of the real estate corporation must consist solely of real estate, cash and demand deposits in a bank, a trust company or a savings and credit union that is an institution registered under the Deposit Insurance Act (chapter A-26) and its revenue must come solely from such deposits or such real estate;

(3)  the real estate corporation may not raise capital except by issuing common shares or by loans secured by hypothec on the real estate that it holds;

(4)  all the shares of the share capital of the real estate corporation must be acquired and held by the same plan;

(5)  the administrator of the plan shall keep, as long as it is the holder of the shares of a real estate corporation, an undertaking by the latter to permit the Board to examine the books and registers of the corporation and to submit to the Board, within 6 months of the end of each fiscal year of the corporation, its financial statements prepared on an accrual basis and audited by an accountant, and a detailed list of its investments with an indication of their book value and their market value;

(6)  the fiscal year of the real estate corporation shall coincide with that of the plan;

(7)  all the deposits and investments of the real estate corporation shall be made in its own name;

(8)  the standards prescribed by sections 74, 75, 76 and 81 shall be observed when the real estate corporation acquires and holds real estate as if it were the plan holding the shares of the corporation which itself acquired and held the real estate instead of the real estate corporation;

(9)  for the purposes of paragraph 8, the total amount mentioned in subparagraph a of section 81 and that mentioned in subparagraph b of the same section shall be calculated by taking into account the amount of all investments covered by those sections made by any real estate corporation whose shares the plan holds and by the plan itself;

(10)  notwithstanding paragraph 8, the real estate corporation may acquire from the plan that holds its shares real estate held by the latter in accordance with the standards of this Division;

(11)  the investments of a real estate corporation at the time when the plan becomes the holder of all its shares shall be in accordance with the standards of this Division as if it were the plan itself that made them at the same time;

(12)  real estate acquired by a plan in application of section 73 may not be held by a real estate corporation more than 7 years, including any time during which a plan or a real estate corporation held it;

(13)  if one of the transactions covered by section 90 is made by a real estate corporation, the second paragraph of that section shall apply not only to persons covered by it as if it were the plan holding the shares of the corporation that itself carried out the transaction, but also to any officer or employee of the real estate corporation.

(3)  The restrictions in sections 69 and 89 shall not apply to the acquisition and holding by a plan of the shares of a real estate corporation.

O.C. 354-85, s. 3.

78. A plan may acquire and hold annuity contracts and life insurance policies, other than term life insurance policies. Such contracts and policies shall be issued by an insurance company or association registered in the Province or guaranteed by the Government of Canada.

Section 89 does not apply to investments made under this section.

R.R.Q., 1981, c. R-17, r. 1, s. 78.

79. A plan may make loans secured by the shares of a corporation or of a cooperative agricultural association, the shares or preferred shares of a cooperative association or bonds or other securities which it is authorized to acquire and hold. Such loans shall be subject to the same restrictions and conditions as investment in such securities.

R.R.Q., 1981, c. R-17, r. 1, s. 79.

80. The assets of a plan may be invested or loaned otherwise than as authorized by sections 65 to 73 and 77 to 79 provided:

(a)  that the total amount of such investments does not exceed 7% of the book value of the plan’s total assets;

(b)  that such investments do not derogate from the restrictions imposed by the second paragraph of section 69;

(c)  that such investments be not in real estate.

R.R.Q., 1981, c. R-17, r. 1, s. 80.

81. The assets of a plan may be invested in real estate otherwise than in real estate as authorized by sections 74 and 75 provided:

(a)  that the total amount of such investments does not exceed 7% of the book value of the plan’s total assets;

(b)  that, where real estate is not acquired or held for the production of income, the total amount of such investments does not exceed 2% of the book value of the plan’s total assets;

(c)  that, where real estate is acquired and held for the production of income, the investments in the real estate constituting a single undertaking do not exceed 2% of the book value of the plan’s total assets;

(d)  that the real estate acquired and held be not situated outside Canada.

R.R.Q., 1981, c. R-17, r. 1, s. 81.

82. The assets of a plan shall not be lent to the spouse or child of the employer or, where the employer is a corporation, to a director or officer of such corporation or to his spouse or child.

R.R.Q., 1981, c. R-17, r. 1, s. 82.

83. The assets of a plan shall not be lent to a corporation of which more than half the shares of the capital stock are owned by the spouse or a child of the employer, or any combination thereof or, where the employer is a corporation, by a director or an officer of such corporation or his spouse or child, or any combination thereof.

R.R.Q., 1981, c. R-17, r. 1, s. 83.

84. The assets of a plan shall not be lent to an administrator of the retirement fund or one of his employees. Moreover, they shall not be lent to the syndicate or the association representing the employees of the employer or to an officer or an employee of such syndicate or such association.

The prohibition stipulated in this section also applies to the spouse or child of any person mentioned therein.

R.R.Q., 1981, c. R-17, r. 1, s. 84.

85. Notwithstanding sections 82, 83 and 84, the assets of a plan may be lent on the security of a hypothec on the residential property of an employer’s employee or of the spouse or child of such employee provided such residential property be primarily for his own use.

R.R.Q., 1981, c. R-17, r. 1, s. 85.

86. No plan shall invest in shares or bonds or other securities of a corporation or a cooperative agricultural association which fails to pay the prescribed dividends on its shares or the interest on its bonds or other securities, nor make a loan to it.

Furthermore, no plan shall invest in shares or preferred shares or bonds or other securities of a cooperative association which fails to obtain the prescribed yield on its shares or preferred shares, nor may it make a loan to it.

R.R.Q., 1981, c. R-17, r. 1, s. 86.

87. With the exception of deposit contracts with a life insurance company and deposits payable on demand in a bank, with a trust company or in a savings and credit union with is a registered institution within the meaning of the Insurance Deposit Act, a plan shall not make any investment or loan other than those authorized by this Division.

R.R.Q., 1981, c. R-17, r. 1, s. 87.

88. For the application of this Division, bonds or debts secured, in particular, by hypothec, mortgage, pledge, lien or privilege or under an act, upon property of the class mentioned in this Division, or by the conveyance or transfer of such property, are deemed secured by it, the words “real estate” including leaseholds (tenures à bail) outside Québec.

R.R.Q., 1981, c. R-17, r. 1, s. 88.

89. Not more than 10% of the book value of the total assets of a plan shall be lent to any one person or invested in any one corporation, partnership or association. In each case, the aggregate of loans and investments shall be established by taking into account all the loans and investments on real estate or equipment used by such same person, corporation, partnership or association.

The restrictions imposed by this section do not apply to bonds or other securities guaranteed by the Government of Canada or of a province nor to deposit contracts with a life insurance company.

R.R.Q., 1981, c. R-17, r. 1, s. 89.

90. Except for assets of a plan that are under the control of a life insurance company, a trust company or a corporation specially established to administer that plan, all investments, deposits and loans of a plan shall be made in the name of the plan.

None of the persons mentioned hereunder shall accept or be the beneficiary of, either directly or indirectly, any fee, brokerage, commission or other consideration for or on account of any loan, deposit, purchase, payment, exchange or sale made by or on behalf of the plan:

(a)  the trustee or the administrator;

(b)  the employer;

(c)  a union or association of employees whose members are covered by the plan;

(d)  an officer or an employee of a person mentioned in paragraphs a, b and c.

R.R.Q., 1981, c. R-17, r. 1, s. 90.

91. If, following the reorganization or winding-up of a corporation or the amalgamation of several corporations, securities held by a plan are replaced by other securities which the plan is not permitted to hold under this Division, it shall not hold them for more than 5 years without regarding them as investments made under section 80.

R.R.Q., 1981, c. R-17, r. 1, s. 91.

92. A plan registered in a province having similar legislation may comply with the investment standards established by such similar legislation.

R.R.Q., 1981, c. R-17, r. 1, s. 92.

93. Where, on 8 January 1966, the investments of a plan do not comply with the standards, they shall be brought into conformity therewith before 1 January 1971.

An additional period of time may be granted by the Board if it considers that such an extension is in the interest of the members of the plan.

R.R.Q., 1981, c. R-17, r. 1, s. 93.

93.1. The sums of money received by the Caisse de dépôt et placement du Québec and derived from a pension plan contemplated by section 20 of An Act respecting the Caisse de dépôt et placement du Québec (chapter C-2) and investments pertaining to such plans may also be managed in accordance with the Division IV of that Act.

O.C. 3078-82, s. 1.

DIVISION VIII TRUSTEESHIP

94. The curator appointed by the Board shall recover the amounts due to the plan, pay the debts of the plan and determine whether, in the interests of the members of the plan, he should continue the plan or terminate it.

R.R.Q., 1981, c. R-17, r. 1, s. 94.

DIVISION IX PENSION PLANS OF MUNICIPAL CORPORATIONS AND SCHOOL BOARDS

95. A plan established by a municipal corporation or a school board for its employees shall not be registered until the Board is satisfied that the plan has been approved by the Commission municipale or the Minister of Education, as the case may be.

R.R.Q., 1981, c. R-17, r. 1, s. 95.

96. Notwithstanding section 89, the plan of a municipal corporation, an urban or regional community, or a school board may invest 25% of its assets in the bonds issued by such corporation.

R.R.Q., 1981, c. R-17, r. 1, s. 96.

REFERENCES

R.R.Q., 1981, c. R-17, r. 1

O.C. 2708-82, 1982 G.O. 2, 3595

O.C. 3078-82, 1983 G.O. 2, 84

O.C. 377-84, 1984 G.O. 2, 1154 and 1617

O.C. 354-85, 1985 G.O. 2, 1074

S.Q. 1987, c. 95, s. 402

O.C. 1158-90, 1990 G.O. 2, 2318