r-15.1, r. 7 - Regulation respecting the exemption of certain categories of pension plans from the application of provisions of the Supplemental Pension Plans Act

Updated to 1 January 2016

This document has official status.

chapter R-15.1, r. 7

Regulation respecting the exemption of certain categories of pension plans from the application of provisions of the Supplemental Pension Plans Act

Supplemental Pension Plans Act

(chapter R-15.1, s. 2).

O.C. 1160-90; O.C. 436-2004, s. 1; O.C. 159-2007, s. 1.

DIVISION I ADMINISTRATION OF THE PLAN

1. Any pension plan having not more than 25 members and beneficiaries may, if it so provides and notwithstanding sections 147, 147.1 and 166 of the Supplemental Pension Plans Act (chapter R-15.1), be administered by the employer who is a party to the plan or by a pension committee composed of at least the following members:

(1)  one plan member or one beneficiary designated on the conditions and within the time limits set out in the plan or one member designated by the majority of the members and beneficiaries at the meeting held each year in application of section 166 of the Act;

(2)  a member who, designated under the conditions and within the time periods provided in the plan, is neither a party to the plan nor a third party to whom section 176 of the Act prohibits the granting of a loan.

The text of any plan administered by such committee shall state the number of members that the committee must have. It shall also provide for the conditions and time periods applicable to the designation and replacement of committee members. It may likewise provide that the members and beneficiaries may, during the meeting referred to in paragraph 1 of the first paragraph, designate by majority vote a member in addition to those referred to in the first paragraph. The second paragraph of section 147.1 of the Act applies to that additional member.

The text of any plan administered by the employer shall provide for the conditions and time periods applicable to the designation and replacement of the employer.

O.C. 1160-90, s. 1; O.C. 1151-2002, s. 1.

2. The second paragraph of section 149 of the Act applies to the employer who administers a pension plan in conformity with section 1.

O.C. 1160-90, s. 2; O.C. 1151-2002, s. 2.

3. Every person or body that, in application of section 1, is designated to administer the pension plan in replacement of the person or body that continued to administer that plan in accordance with section 318 of the Act or in replacement of a pension committee established as prescribed by section 147 of the Act shall take office:

(1)  in the case of the replacement of an administrator referred to in section 318 of the Act, not later than the day following the date on which the plan may no longer be administered in accordance with that section;

(2)  in the case of the replacement of a pension committee established as prescribed by section 147 of the Act, not later than the date of the beginning of the first fiscal year following the designation of the new administrator.

O.C. 1160-90, s. 3.

4. If the majority of the members and beneficiaries decide at a meeting held pursuant to section 166 of the Act decide that the plan shall be administered by a pension committee, the employer may not continue to administer the plan at the expiry of the third month following that meeting.

If, at a meeting held pursuant to section 166 of the Act, the majority of the members and beneficiaries consent to the administration of the plan by the employer who is a party to the plan, no member of a pension committee in office on the date of such meeting may continue to administer the plan on expiry of the third month following that meeting.

O.C. 1160-90, s. 4; O.C. 1151-2002, s. 3.

5. Any plan whose number of members and beneficiaries increases to more than 25 shall, no later than 180 days following such increase, be administered by a pension committee formed as provided for in chapter XI of the Act.

O.C. 1160-90, s. 5; O.C. 1151-2002, s. 4.

DIVISION II

(Revoked)

O.C. 1160-90, Div. II; O.C. 1151-2002, s. 5.

6. (Revoked).

O.C. 1160-90, s. 6; O.C. 1151-2002, s. 5.

DIVISION III ARBITRATION WITH RESPECT TO THE ALLOCATION OF THE SURPLUS ASSETS OF A TERMINATED PLAN

O.C. 1893-93, s. 1; O.C. 1151-2002, s. 6.

7. A terminated pension plan is exempted from the application of the provisions of chapter XIV.1 of the Act where the following conditions are met:

(1)  the employer party to the plan is deemed, pursuant to the second paragraph of section 230.7 of the Act, to have renounced any entitlement in the plan’s surplus assets;

(2)  the plan’s members and beneficiaries have agreed in writing on the method to be used to allocate among themselves the plan’s entire surplus assets and to adjust the share of each of them in the event that there is any variation in such surplus or in the total value of their benefits between the date of termination and the date of payment.

In such case:

(1)  the agreement reached by the members and beneficiaries has the same value and effect as an agreement reached in accordance with section 230.6 of the Act;

(2)  the pension committee shall send to Retraite Québec, no more than 30 days after receipt of the agreement referred to in paragraph 1:

(a)  a copy of the agreement;

(b)  a certificate confirming that all the members and beneficiaries of the plan, including those who conserve that status pursuant to sections 240.2, 308.3 and 310.1 of the Act, have consented to the agreement and that it can submit their consent to Retraite Québec on demand;

(c)  a supplement to the termination report in conformity with the provisions of section 207.5 of the Act.

O.C. 1160-90, s. 7; O.C. 1893-93, s. 1; O.C. 1151-2002, s. 6.

7.1. In the case of a multi-employer plan, section 7 applies, with the necessary modifications, with respect to the surplus assets determined in respect of each employer party to the plan and of the members and beneficiaries whose benefits are included in the group of benefits related to such employer.

O.C. 1151-2002, s. 6.

DIVISION IV SIMPLIFIED PENSION PLAN

O.C. 657-94, s. 1.

8. A defined contribution pension plan that fulfills the conditions prescribed in this section and in sections 9 to 19 is called a “simplified pension plan”. It is exempted from the application of the Act except with respect to the following provisions:

— Application and interpretation – sections 1 to 5;

— Nature of a pension plan – section 6, the first paragraph of section 7 and sections 11 and 12;

— Establishment and effective date – section 13, the first paragraph and subparagraphs 11, 13 and 15 of the second paragraph of section 14 and sections 16 and 18;

— Amendment – section 19, the first paragraph of section 22 and section 23;

— Registration – the first paragraph and subparagraphs 1, 6 and 7 of the second paragraph of section 24 and sections 25 to 32, it being understood that section 26 does not apply with respect to an employer who joins the plan and that it applies only to members who are affected by an amendment, to members who cease to be members of the plan in the event of a division and to members of a plan that is absorbed in the event of a merger;

— Membership – section 33, except the third paragraph, and sections 34 to 36;

— Contributions – sections 37, 38, 41 and 43, section 44, except subparagraphs 1 to 3 of the first paragraph and the third paragraph, sections 45.1 to 47 and sections 49 to 53;

— Refunds and pension benefits – sections 54, 55, 57, 63.1, 64 and 68, the first paragraph of section 73, section 85, restricting the application of the second paragraph to the spouse who has spousal status on the day preceding the death of the member, and section 92;

— Transfers of benefits and assets – the third paragraph of section 98, the fourth paragraph of section 99 and section 103;

— Transfer of benefits between spouses – sections 107 to 110.1;

— Information to members – section 111, section 112, with the exception of paragraph 2 of the first paragraph and the second paragraph, it being understood that the first sentence of the first paragraph applies only to members in the service of the employer affected by the amended provisions, the first and third paragraphs of section 113 and section 115;

— Administration – sections 150 to 154, the second paragraph of section 155, section 156.1, the first paragraph of section 158, section 159 with respect to the delegatee of the financial institution that administers the plan, sections 161 and 163 to 165, section 171, sections 174 to 176, paragraphs 2 and 3 of section 177 and sections 178 to 193;

— Division and merger – section 197;

— Proceeding before the Administrative Tribunal – section 243;

— Regulations, functions and powers of Retraite Québec – section 244, as well as sections 245 to 263;

— Miscellaneous and transitional provisions – section 264, with the understanding that the second paragraph thereof applies only with respect to the contributions and other sums credited to the locked-in account of the member, as well as sections 282, 285, 312, 319 and 321.

O.C. 657-94, s. 1; O.C. 1151-2002, s. 7; O.C. 436-2004, s. 2; O.C. 1052-2012, s. 1.

9. The administrator of the plan shall be an insurer referred to in section 10 of the Act, a bank, a savings and credit union or a trust company, and must be authorized to carry on its activities in Québec or elsewhere in Canada where an agreement referred to in section 249 or section 285 of the Act applies.

O.C. 657-94, s. 1.

10. In addition to the requirements prescribed in subparagraphs 11, 13 and 15 of the second paragraph of the first paragraph of section 14 of the Act, such plan shall provide:

(1)  that it is incumbent upon the employer to inform employees of their eligibility for the plan and that the employer may decide to which class of employees covered by the plan an employee belongs;

(2)  that the member may determine annually, or if the plan so provides, more frequently, the additional voluntary contribution that he undertakes to make, by giving written notice thereof to the employer, who shall collect such additional voluntary contribution;

(3)  that the sum of the contributions that may be paid on behalf of a member may not be subject to limits lower than those allowed under the taxation rules Income Tax Act (R.S.C. 1985 c. 1 (5th Suppl.)), subparagraphs 147.1 (8) and (9));

(4)  that, within 60 days after any unpaid contribution becomes due, the financial institution that administers the plan shall, in addition to notifying Retraite Québec as prescribed by section 51 of the Act, notify the retirement information committee referred to in paragraph 18 or, in the absence of such information committee, the member concerned and, where an agreement referred to in paragraph 27 has been entered into, the accredited association that is a party to that agreement;

(5)  that, if contributions due are paid after the transfer refund or payment of the balance of the member’s accounts, the administrator of the plan shall transfer or pay those contributions as it did for the accounts in which they were to be entered; that contributions due shall bear interest, from the date on which they become due until they are paid to the pension fund; that, for any year or part of a year in which contributions due have not been paid, the applicable interest rate corresponds to the average of the rates of return on personal 5-year term deposits with chartered banks for the 12 months ending in November of the preceding year; those rates are compiled monthly by Statistics Canada and published in the Bank of Canada Banking and Financial Statistics in series V122515 in the CANSIM system;

(5.1)  that the member is entitled, at any time and upon application, to a refund of all or part of his not locked-in account or to the transfer of all or part of that account to a pension plan of his choice, provided such plan is a plan within the meaning of the third paragraph of section 98 of the Act or to a registered retirement income fund as defined in section 1 of the Taxation Act (chapter I-3) and such refund or transfer shall be made within 60 days following the member’s application;

(6)  that within 90 days following the sending of the statement required in the event of cessation of active membership, an account of a member who is no longer an active member shall:

(a)  where such account is locked-in, be transferred to a pension plan within the meaning of the third paragraph of section 98 of the Act, selected by the member or, failing such selection, by the financial institution;

(b)  where such account is not locked-in, either be transferred to a pension plan within the meaning of the third paragraph of section 98 of the Act or to a registered retirement income fund as defined in section 1 of the Taxation Act, selected by the member, or be refunded to the member. Where the member omits to give instructions as to the payment of his account before the expiry of the 60-day period mentioned above, the financial institution may make such payment in the manner that it considers appropriate;

(7)  that the normal retirement age shall be set as the first day of the month that follows the month during which a member reaches 65 years of age or the day of his 65th birthday if that day falls on the first day of the month;

(8)  (subparagraph revoked);

(9)  that the balance of the member’s accounts, with accrued interest to the date of payment, shall, upon the member’s death, be paid to his spouse or, failing that, to his successors;

(10)  that the member’s spouse may, by written notice to the financial institution, waive the right to receive the payment provided for in paragraph 9 and may revoke such waiver by written notice to the financial institution before the death of the member;

(11)  that the member may demand a lump-sum payment of his locked-in account if a physician certifies that his physical or mental disability reduces his life expectancy and that such payment be made within 60 days following the member’s application therefor;

(12)  that, in the 10 years preceding the normal retirement age, an active member is entitled to transfer all or part of his locked-in account and that the transfer shall be made to a pension plan within the meaning of the third paragraph of section 98 of the Act selected by the member; that such right may be exercised only once in 12-month period;

(13)  that the member whose active membership has ceased may demand the refund of his locked-in account where that account is less than 20% of the Maximum Pensionable Earnings under the Québec Pension Plan (chapter R-9) for the year in which he became entitled to such refund and that the refund be made within 90 days following the application of the member therefor;

(14)  that a transfer referred to in subparagraphs 5.1, 6 or 12 may, at the discretion of the financial institution and in the absence of contrary stipulations, be made by remitting the investment securities related to the account;

(15)  (subparagraph revoked);

(16)  (subparagraph revoked);

(17)  the name of the financial institution that administers the plan;

(18)  that the financial institution that administers the plan shall provide, free of charge, the following documents or information to the employer or to any retirement information committee set up following a decision by a majority of the 50 members or more who work for an employer that is a party to the plan, provided that the information committee has notified the financial institution and the employer that it has been set up:

(a)  a copy of the portion of the plan that sets out the provisions applying to all the employers and a copy of the portion that sets out the dispositions specific to the employer concerned;

(a.1)  the annual statement and the financial report referred to in section 161 of the Act;

(b)  upon request, any document relating to the administration of the plan, in particular, the acts of delegation of powers granted by the financial institution that administers the plan, the correspondence conducted between Retraite Québec and that financial institution during the last 60 months, the agreements referred to in paragraph 27 and the written acknowledgements referred to in subparagraph 2 of the third paragraph of section 1.1 of the Regulation respecting supplemental pension plans (chapter R-15.1, r. 6), except personal information on members or on the other employers that are parties to the plan;

(19)  that the retirement information committee referred to in paragraph 18, or the employer in the absence of such information committee for members bound to that employer, shall make available to members, upon request and free of charge, any document or information exigible from the financial institution that administers the plan;

(20)  that the fiscal year of the plan shall end on 31 December of each year;

(21)  that the operating expenditures of the retirement information committee referred to in subparagraph 18 are not payable by the pension fund;

(22)  that, among the investments offered by the financial institution that administers the plan and subject to the conditions related to those investments at the time at which they may be made, each member shall decide which investments are to be made with his accounts and that those investments shall be made in accordance with the tax rules governing investments of registered retirement savings plans (Income Tax Act, (R.S.C. 1985, c. 1 (5th Suppl.)), subsection 146 (1), definition of “qualified investment”, and with the regulations made under paragraph d of that definition);

(23)  that a member’s accounts may be invested only as follows:

(a)  with an insurer, according to the terms of a contract guaranteed in whole or in part by the Canadian Life and Health Insurance Compensation Corporation;

(b)  in deposits insured in whole or in part by the Autorité des marchés financiers or by a similar body;

(c)  in units of unincorporated mutual funds or segregated funds;

(d)  in securities issued or guaranteed by the Gouvernement du Québec, the Government of Canada or the government of a Canadian province;

(24)  that the financial institution that administers the plan shall keep in its books, for each member, a “locked-in” account and a “not locked-in” account;

(25)  that, in each member’s locked-in account, shall be entered:

(a)  his member contributions, unless the employer stipulates that they be entered in the not locked-in account;

(b)  the contributions made to his benefit by the employer;

(c)  the dividends, refunds and other advantages granted with respect to the account;

(d)  where the financial institution allows their transfer to the plan:

i.  the sums transferred from a retirement savings instrument that provides that such sums be converted into a life pension;

ii.  the sums transferred from a deferred profit sharing plan as defined in section 1 of the Taxation Act (chapter I-3), into which they were paid by an employer and in respect of which the employer stipulates that they be entered in such account;

(25.1)  that, in each member’s not locked-in account, shall be entered:

(a)  his member contributions, provided the employer so stipulates;

(b)  his additional voluntary contributions;

(c)  the dividends, refunds and other advantages granted with respect to the account;

(d)  the sums, other than those referred to in subparagraph d of paragraph 25, that are transferred with the financial institution’s consent;

(25.2)  that no sum may be transferred between the locked-in account and not locked-in account of the member;

(26)  that the financial institution that administers the plan or the employer may divide or merge the plan;

(27)  that any agreement between an employer and an accredited association representing the members of the plan with respect to sharing the powers granted to the employer under subparagraphs 26 and 28, the first paragraph of section 11 and section 11.0.1 shall be an integral part of the plan; the stipulations of such agreement shall be described in the part of the plan that contains the provisions specific to each employer concerned;

(28)  that an employer may withdraw from the plan and that the financial institution may withdraw an employer from the plan or terminate the plan;

(29)  that, subject to the third paragraph of section 11.1, no amendment to the plan that cancels refunds or pension benefits, limits eligibility therefor or reduces the amount or value of the members’ benefits may become effective before the 30th day following, in the case of an amendment established by a collective agreement or an arbitration award in lieu thereof or rendered compulsory by an order or decree, the effective date of the agreement, award, order or decree and in all other cases, the date of sending of the notice provided for in section 26 of the Act;

(29.1)  that an amendment referred to in subparagraph 29 applies only to service rendered after the date on which it takes effect;

(29.2)  that the restrictions provided for in subparagraphs 29 and 29.1 do not apply in the cases referred to in subparagraphs 1 and 2 of the second paragraph of section 20 of the Act;

(30)  that the plan becomes effective on either of the dates prescribed by section 13 of the Act or on the date fixed by the financial institution that administers the plan, whichever comes first.

Notwithstanding the second paragraph of section 5 of the Act, the plan may not provide for the payment or refund of a member’s locked-in account except in conformity with subparagraphs 9,11 and 13 of the first paragraph.

The financial institution must offer at least 3 investment choices that, in addition to being diversified and having different degrees of risk and different contemplated yields, allow the creation of portfolios generally adapted to the needs of the members.

O.C. 657-94, s. 1; O.C. 1151-2002, s. 8; O.C. 436-2004, s. 3; O.C. 798-2006, s. 2; O.C. 159-2007, s. 2.

11. Each employer shall stipulate in the plan

(1)  whether membership in the plan is optional or compulsory;

(2)  the conditions for eligibility and membership and the conditions for withdrawal;

(3)  the employer contribution that it undertakes to pay or the method used for calculating that contribution;

(3.1)  the contributory or non-contributory nature of the plan and, in the case of the former, the member contribution or the method for its calculation;

(3.2)  for the members as a whole, the account, either locked-in or not locked-in, in which will be entered, if any, the member contributions, and the account in which will be entered the amounts transferred from a deferred profit sharing plan;

(4)  whether the employer or the members will pay for the operating expenditures of the retirement information committee referred to in paragraph 18 of section 10;

(5)  whether the employer, the members or the pension fund will pay for the administrative expenses of the plan other than those referred to in paragraph 4.

Unless prevented by an agreement, the employer may also stipulate that he will pay, in addition to the contribution referred to in subparagraph 3 of the first paragraph, an additional contribution for which he shall specify the amount or the calculation method as well as the payment method in a written notice sent to the financial institution and to each of the members on behalf of whom such additional contribution will be paid. Such additional contribution is held to be an employer contribution only for the purposes of the provisions of sections 44 to 53 of the Act that apply to the plan pursuant to section 8 of the Regulation. Moreover, such additional contribution may not be taken into account in determining whether, within the meaning of section 34 of the Act, a plan provides for benefits similar to the benefits of another plan.

O.C. 657-94, s. 1; O.C. 1151-2002, s. 9; O.C. 436-2004, s. 4.

11.0.1. The employer may stipulate that the right of a member, provided for in paragraph 5.1 of section 10, to receive a refund of his not locked-in member contributions or to transfer them is deferred to the earlier of:

(1)  the date of the end of his active membership;

(2)  the date on which the member is less than 10 years from the normal retirement age.

Such stipulation covers service rendered before and after its coming into effect.

The stipulation shall provide that the member may, nevertheless, transfer, in whole or in part, such contributions to a registered retirement savings plan to establish a home buyers plan or a lifelong learning plan. The member must declare in writing to the financial institution that he is transferring the contributions for that sole purpose.

Where the employer makes the stipulation after joining the plan, the financial institution that administers the plan shall notify the members 90 days before the coming into force of the stipulation.

The plan must provide that a member may demand a lump-sum payment of the contributions referred to in this section, in accordance with the conditions set out in paragraph 11 of the first paragraph of section 10.

O.C. 798-2006, s. 1; O.C. 1013-2011, s. 1.

11.1. A simplified pension plan may contain standard provisions and variations thereof that an employer may stipulate with respect to the regular intervals for the collection or the payment of contributions or to one or the other of the matters referred to in section 11.

The employer’s stipulations with respect to the matters referred to in the first paragraph, where such stipulations are compatible with the plan’s standard provisions or variations thereof that have been registered with Retraite Québec, are exempted from the application of sections 19 and 24 of the Act as well as from the provisions of sections 1.1 and 2.1 of the Regulation respecting supplemental pension plans (chapter R-15.1, r. 6) that relate to the registration of an amendment to a plan.

Stipulations that, pursuant to the second paragraph, are exempted from the application of the provisions of the Act or Regulation referred to in this paragraph take effect on the date indicated in a notice that the financial institution shall send to the members and whose contents and method of sending shall be in conformity with the rules provided for in section 26 of the Act. Except in the case provided for in subparagraph 1 of the second paragraph of section 20 of the Act and where the affected members have given consent, such stipulation, where it has the effect of an amendment referred to in subparagraph 29 of the first paragraph of section 10 of the Regulation, applies only to service rendered after the effective date indicated in the notice in respect thereof, and such date may not be prior to the 30th day following:

(1)  in the case of a stipulation established by a collective agreement or arbitration award in lieu thereof or rendered compulsory by an order or decree, the effective date of the agreement, award, order or decree;

(2)  in all other cases, the date of sending of the notice.

O.C. 436-2004, s. 5.

12. An employer that withdraws from a simplified pension plan shall so notify the financial institution in writing and, where applicable, the accredited association bound by the plan to the employer.

O.C. 657-94, s. 1; O.C. 1151-2002, s. 10.

13. The financial institution that administers a simplified pension plan and that terminates it or withdraws an employer who is a party to it shall notify in writing the employers concerned as well as, where relevant, the accredited associations connected with such employers by the plan. It shall likewise, in such cases and in the case where it receives a notice of withdrawal from an employer, so inform Retraite Québec as well as the affected members. The notice sent to each member shall be accompanied with a statement of the member’s benefits and indicate that those benefits will be transferred, within 60 days following the sending of the statement, to a pension plan within the meaning of the third paragraph of section 98 of the Act that has been chosen by the member or failing such choice, by the financial institution.

O.C. 657-94, s. 1; O.C. 1151-2002, s. 11; O.C. 436-2004, s. 6.

14. Any amount that must return to a member affected by the termination of the plan shall be remitted to the Minister of Revenue if the member cannot be found.

O.C. 657-94, s. 1; O.C. 1151-2002, s. 12.

15. After having paid the benefits of the members affected by the withdrawal of an employer or the termination of the plan, the financial institution that administers the plan shall, within 90 days, render an account of that payment to Retraite Québec by filing,

(1)  in the case of the withdrawal of an employer, an attestation signed by a person in authority certifying that the wound-up benefits are those that could be claimed by the members affected by that withdrawal and that they have been paid in accordance with the Act; or

(2)  in the case of a termination, that attestation and a termination report composed of the annual statement and financial report provided for in section 161 of the Act; that report shall cover the period included between 1 January of the current year on the date of the notice of termination given to members until their benefits are fully paid.

O.C. 657-94, s. 1; O.C. 1151-2002, s. 13.

16. The statement that the financial institution must send to the member in application of section 112 of the Act shall indicate the amount of the additional contribution that the employer paid to the member’s benefit during the fiscal year and show the information provided for in paragraphs 10 to 14 of section 57 and in section 59.1 of the Regulation respecting supplemental pension plans (chapter R-15.1, r. 6) so that the member can know the results of the changes during the fiscal year in his locked-in and not locked-in accounts.

O.C. 657-94, s. 1; O.C. 1151-2002, s. 14; O.C. 436-2004, s. 7.

16.1. The financial institution must append to the annual statement that it sends pursuant to section 161 of the Act a list showing the name and date of joining or withdrawal, as the case may be, of each employer who became or ceased to be a party to the plan during the fiscal year covered by the statement.

O.C. 436-2004, s. 7.

16.2. In the event of a plan’s merger, the financial institution must provide to each of the members affected by the merger, within 30 days thereof, a statement updating, as at the date of the merger, the information contained in the last annual statement or in any other statement subsequent thereto and covering the same subjects that was sent to the member.

O.C. 436-2004, s. 7.

16.3. The financial institution that administers a simplified pension plan shall keep for each employer party to the plan a register in which shall be entered:

(1)  the date on which the employer joined the plan and that on which he withdrew from the plan;

(2)  a list of the amendments made to the portion of the plan that contains the provisions specific to the employer;

(3)  a copy of the notices sent pursuant to the third paragraph of section 11.1.

O.C. 436-2004, s. 7.

17. For the purposes of the Act and regulations, except paragraph 1 of section 176 of the Act, the obligations of the pension committee or of its members are incumbent upon the financial institution that administers the simplified pension plan. For the purposes of section 16, and subparagraph 1, 6 and 7 of the second paragraph of section 24 of the Act, the employer’s obligations are incumbent upon itself.

For the purposes of section 35 of the Act, the pension committee’s obligations are incumbent upon the employer.

For the purposes of the second paragraph of section 115 of the Act, the pension committee’s obligations are incumbent upon the retirement information committee referred to in subparagraph 18 of the first paragraph of section 10 or, failing that, upon the employer.

O.C. 657-94, s. 1; O.C. 1151-2002, s. 15.

18. The text of the plan shall be in the form of a single, complete document into which no other external provision may be incorporated. It shall bear the following notation on its cover or title page: “Simplified Pension Plan” and it shall identify separately the provisions applicable to all employers and all the provisions specific to each employer.

O.C. 657-94, s. 1.

19. A pension plan is not validly established where it results from an amendment to a plan already in effect and where the purpose of the amendment is to convert the plan into a simplified pension plan.

O.C. 657-94, s. 1.

DIVISION IV.1 PAYMENT OF THE BENEFITS OF THE ACTIVE MEMBERS UPON CONVERSION OF A PENSION PLAN INTO A SIMPLIFIED PENSION PLAN

O.C. 436-2004, s. 8.

19.1. This division applies only to a pension plan referred to in paragraph 2 or 3 of section 116 of the Act.

O.C. 436-2004, s. 8.

19.2. A pension plan terminated by means of a notice that, in addition to respecting the requirements of section 204 of the Act, stipulates that the plan is terminated in order to be converted into a simplified pension plan established with the financial institution indicated therein is, provided the provisions of section 19.3 of the Regulation are met, exempted from the application of section 236 of the Act with respect to the uninsured benefits of the members who are active members on the date of termination and who join the simplified pension plan.

The sender of the notice provided for in the first paragraph shall, without delay, provide a copy to Retraite Québec.

O.C. 436-2004, s. 8.

19.3. The plan’s termination date may not be more than 60 days after the date on which the notice provided for in section 19.2 is sent.

The date on which the employer party to the terminated plan joins the simplified pension plan mentioned in the notice may not be later than the day following the plan’s termination date.

O.C. 436-2004, s. 8.

19.4. The uninsured benefits of the members referred to in section 19.2 shall be paid by transferring the value of such benefits to the simplified pension plan established with the financial institution mentioned in the notice provided for in that section.

O.C. 436-2004, s. 8.

DIVISION V PENSION PLANS DISPENSED FROM A FINANCIAL REPORT AUDIT

O.C. 1466-95, s. 1.

20. The following pension plans are dispensed from the financial report audit provided for in section 161 of the Act:

(1)  a guaranteed pension plan;

(2)  a simplified pension plan;

(3)  for its first fiscal year, a pension plan having fewer than 50 members and beneficiaries and net assets of a market value of less than $1,000,000.

Also dispensed from such an audit, for any fiscal year subsequent to its first, is a pension plan of the category provided for in subparagraph 3 of the first paragraph unless, at the annual meeting, 1/3 or more of the members and beneficiaries require that such an audit be carried out for the current fiscal year concerned. A pension committee intending to avail itself of such a dispensation shall, in the notice calling the meeting and during the meeting, inform the members and beneficiaries of its intention and of their right to decide otherwise.

O.C. 1466-95, s. 1; O.C. 1151-2002, s. 16.

DIVISION VI MULTI-EMPLOYER PLANS

O.C. 280-99, s. 1.

21. A multi-employer pension plan registered before 1 January 1990 that has the characteristics mentioned in section 22 and that is the object of an amendment referred to in the first paragraph of section 23 is exempted, from the registration of said amendment and on the conditions set out in section 24, from the application of the provisions of sections 39, 132, 142 and 143, the second paragraph of section 144, sections 145, 145.1, 146 and 200, paragraphs 2 and 3 of section 201, the second and third paragraphs of section 202, paragraph 1 of section 203, section 204 as to the employer’s right to terminate the plan in the absence of an express provision in the plan authorizing such termination, section 216, subparagraph 3 of section 218, sections 220 to 230, the third paragraph of section 230.0.0.9, sections 230.0.1 to 230.8, chapter XIV.1, section 317 and the first paragraph of section 317.1 of the Act as well as the application of section 52 of the Regulation respecting supplemental pension plans (chapter R-15.1, r. 6).

O.C. 280-99, s. 1; O.C. 1151-2002, s. 17; O.C. 1013-2011, s. 2.

22. The characteristics that a multi-employer plan referred to in section 21 must have are the following:

(1)  the plan is a defined benefit-defined contribution plan;

(2)  the plan has, on the date of transmission of the application for registration of the amendment intended to exempt it from the application of the provisions mentioned in the said section, at least 7 employers who have 15 or more active members in their service;

(3)  according to the provisions of the plan, no employer has the power to amend the plan, directly or indirectly, subject in the latter case, to the consent required under paragraph 3 of section 24 of the Act;

(4)  the plan is not governed by any law that is similar to the Supplemental Pension Plans Act (chapter R-15.1) and emanates from any legislative authority other than the Parliament of Québec, and only workers referred to in section 1 of the Act may be members of the said plan.

O.C. 280-99, s. 1.

23. A plan amendment intended to exempt the plan from the application of the provisions mentioned in section 21 must meet the following conditions:

(1)  the mention “Multi-employer Plan Exempted from the Application of Certain Provisions of the Supplemental Pension Plans Act” appears on the title page or the cover of the plan text;

(2)  anyone who has the power to amend the plan and, unless the plan, as it stood on 15 November 1988, has no provision allocating, in whole or in part, surplus assets to one or more of the employers in the event of the plan’s termination, all the employers who are parties to the plan consent in writing to the proposed exemption and a copy of their consent accompanies the application for registration of the amendment;

(3)  the members of the plan were notified in writing of the effects of the proposed exemption, notably the effects listed in the following subparagraphs, and a copy of the notice is provided to Retraite Québec and the employers who are parties to the plan:

(a)  that the employer’s obligation to fund the plan is limited to payment of the employer contribution provided for by the plan;

(b)  that the exemption from the application of the provisions of section 39 and 146, the third paragraph of section 230.0.0.9 and section 228 of the Act involves a higher risk that the members’ benefits may be reduced in the event of insufficient employer contributions, withdrawal of an employer or termination of the plan;

(c)  (subparagraph revoked);

(d)  that, in the event of plan termination, the surplus assets in their entirety will be allocated to the members and beneficiaries;

(4)  an actuarial valuation of the plan as at the end of the last fiscal year preceding the transmission of the application for registration of the amendment shows that the degree of solvency of the plan as at that date, calculated in accordance with chapter X of the Act and the rules set by paragraphs 4, 7 and 10 of section 24 and, where the said degree is not a whole number, rounded down to the next whole number, is equal to or greater than 120%. For the purposes of the valuation, any provision of the plan, except those arising from the application of section 60 of the Act, that would require that the value of a benefit be at least equal to a given percentage of the member contributions may not be taken into account;

(5)  the pension committee certifies that all the information, notices and documents required under the Act and that are related to the plan in respect of the period prior to the date of registration of the amendment for plan exemption were sent to Retraite Québec and that every amendment to the plan made prior to that date and concerning that period was the object of an application for registration;

(6)  Retraite Québec notified the pension committee that no question related to the plan is pending before it.

Paragraphs 1 and 2 of section 19 and section 30 of the Act do not apply to the amendment referred to in the first paragraph. Moreover, notwithstanding the said paragraphs of section 19, no amendment to the plan for which the application for registration is presented after the date of registration of the amendment referred to in the first paragraph may come into force on a date prior to the said date.

O.C. 280-99, s. 1; O.C. 1151-2002, s. 18; O.C. 1013-2011, s. 3.

24. The conditions for the exemption of the plan are the following:

(1)  (paragraph revoked);

(2)  (paragraph revoked);

(3)  (paragraph revoked);

(4)  notwithstanding section 142 of the Act, the amortization period for an unfunded actuarial liability expires at the end of a fiscal year of the pension plan that ends:

(a)  no later than 3 years after the date of the valuation that determined the liability, if the liability is a solvency deficiency; or

(b)  no later than 6 years after the date of the valuation that determined the liability, if the liability is a funding deficiency;

(5)  (paragraph revoked);

(6)  (paragraph revoked);

(7)  (paragraph revoked);

(8)  where the report on an actuarial valuation of the plan shows that the employer contribution provided for in the plan is less than the current service contribution reduced by the member contributions and increased by the greater of the following amounts:

(a)  the amortization payment determined in respect of the funding deficiency;

(b)  the total of the amortization payments determined in respect of the solvency deficiencies;

the pension committee shall present to Retraite Québec, during the 4 months following the expiry of the period provided for in section 119 of the Act for sending the said report, an application for registration of an amendment to the plan that concerns, notably, contributions, pension benefits and refunds and whose effect is to ensure that the employer contribution becomes sufficient;

(9)  where the requirements of paragraph 8 are not met, the employers who are parties to the plan shall be deemed to have failed to pay into the pension fund their employer contributions and Retraite Québec may then terminate the plan by applying section 205 of the Act;

(10)  in addition to the requirements of Division III of chapter II of the Act, an amendment that increases the value of the commitments arising from the plan may not be made to the plan unless, taking into account the said amendment, the plan is solvent and unless either the report on the actuarial valuation of the entire plan so indicates or such fact is certified by an actuary in a report that defines the assumptions used to that end;

(11)  the plan may not be the object of division or merger unless it ceases to be exempted from the application of the provisions referred to in section 21;

(12)  unless the plan provides otherwise, only the pension committee may terminate the plan;

(13)  the plan’s surplus assets are, in the event of termination and notwithstanding any provision to the contrary, allocated by right to the members and beneficiaries, including those who conserve such status pursuant to one or the other of sections 240.2, 308.3 or 310.1 of the Act in proportion to the value of their benefits;

(14)  (paragraph revoked);

(15)  any amount recovered after the date of the plan’s termination as contributions due and unpaid on that date shall be used to pay the benefits of the members and beneficiaries including, to the extent that the amount recovered constitutes surplus assets, those, if any, who conserve their status pursuant to one or the other of sections 240.2, 308.3 or 310.1 of the Act, proportionally to the value of the benefits of the said members and beneficiaries.

O.C. 280-99, s. 1; O.C. 1151-2002, s. 19; O.C. 1013-2011, s. 4; O.C. 345-2015, s. 1.

25. When a multi-employer plan no longer satisfies one of the characteristics referred to in section 22 or the condition set in subparagraph 1 of the first paragraph of section 23, it ceases to be exempt from the application of the provisions referred to in section 21.

O.C. 280-99, s. 1.

25.1. The person or body empowered to amend a multi-employer pension plan referred to in section 21 may, in writing, instruct the pension committee that administers the plan to take one or more of the following measures for the purposes of the first complete actuarial valuation of the plan dated after 30 December 2009:

(1)  the application of an asset valuation method that, in accordance with the terms and conditions of section 25.2, levels the short-term fluctuations in the market value of the assets of the plan for the purposes of determining the value of those assets on a solvency basis;

(2)  the extension, to 31 December 2015 at the latest, of the period provided for in subparagraph a of paragraph 4 of section 24 to amortize any solvency deficiency determined as at 31 December 2009 or thereafter.

O.C. 1013-2011, s. 5.

25.2. Where instructions were given to the pension committee to apply the measure provided for in paragraph 1 of section 25.1:

(1)  the period used to level short-term fluctuations in the market value of the assets is the period fixed in the instructions, subject to a 5-year maximum period;

(2)  the asset valuation method indicated in the instructions must include the taking into account of the short-term fluctuations in the market value of the assets during such period;

(3)  the assets of the pension plan must be established in accordance with this method for the purposes of the actuarial valuation referred to in section 25.1 and subsequent actuarial valuations.

O.C. 1013-2011, s. 5.

25.3. Where instructions were given under section 25.1 in respect of a pension plan, the value of the plan’s assets, determined on a funding basis, may not be greater than the value that would be determined using the asset valuation method used in the last complete actuarial valuation prior to the valuation referred to in section 25.1.

O.C. 1013-2011, s. 5.

25.4. The report on the first complete actuarial valuation of a pension plan referred to in section 21 whose date is after 30 December 2009 must, when sent to the Régie, be accompanied with a writing whereby the person or body empowered to give instructions under section 25.1 certifies that the report complies with the instructions given to the pension committee, or that no instructions were given.

Notwithstanding any inconsistent provision of the Act, the pension committee has until 26 December 2011 to send the Régie des rentes du Québec the report on the first actuarial valuation of a pension plan whose date is after 30 December 2009.

O.C. 1013-2011, s. 5.

25.5. The provisions of sections 25.1 to 25.4 cease to apply in respect of a pension plan on the earlier of the following dates:

(1)  the date fixed in a writing giving instructions to that effect and sent to the pension committee by the person or body empowered to amend the plan; that date must be the date on which a fiscal year of the plan ends;

(2)  the date of the end of the plan’s first fiscal year beginning after 31 December 2011.

O.C. 1013-2011, s. 5.

25.5.1. The person or body empowered to amend a multi-employer pension plan under section 21 may, in writing, instruct the pension committee that administers the plan to take one or more of the following measures for the purposes of the complete actuarial valuation of the plan as at 31 December 2012 and for subsequent complete actuarial valuations:

(1)  the application of an asset valuation method that, in accordance with the terms and conditions of section 25.2, levels the short-term fluctuations in the market value of the assets of the plan for the purposes of determining the value of those assets on a solvency basis;

(2)  notwithstanding section 142 of the Act and subparagraph a of paragraph 4 of section 24, the extension, to 15 years, of the maximum period provided for to amortize a technical actuarial deficiency determined as at 31 December 2012 or thereafter;

(3)  the elimination of amortization payments related to any technical actuarial deficiency determined on the date of a previous actuarial valuation of the plan.

O.C. 345-2015, s. 2.

25.5.2. Where instructions were given to the pension committee to apply the measure provided for in paragraph 1 of section 25.5.1, section 25.2 applies with the necessary modifications.

O.C. 345-2015, s. 2.

25.5.3. Where instructions were given under section 25.5.1 in respect of a pension plan, the provisions of section 143, the second paragraph of section 144 and sections 145 and 145.1 of the Act apply, notwithstanding section 21, for the purposes of the payment in full of the benefits of a member or a beneficiary. A payment made in accordance with this section constitutes a full discharge of the benefits of a member or beneficiary.

However, the payment conditions provided for in the first paragraph do no apply to the payment in full of the benefits of a member who requested the transfer of his benefits before 14 May 2015 nor to the payment in full of the benefits of a member who, on that date, meets the conditions provided for in the second paragraph of section 99 of the Act in order to exercise the right to transfer.

O.C. 345-2015, s. 2.

25.5.4. The pension committee shall send to the Régie, no later than 28 July 2015, a report that amends or replaces the actuarial valuation report for the plan as at 31 December 2012 and the actuarial valuation report for the plan as at 31 December 2013. The reports must indicate the measures taken in accordance with the instructions given to the pension committee under section 25.5.1.

O.C. 345-2015, s. 2.

25.5.5. The fees provided for under the fourth paragraph of section 14 of the Regulation respecting supplemental pension plans (chapter R-15.1, r. 6) shall be paid to the Régie for each complete month of delay as of 28 July 2015.

O.C. 345-2015, s. 2.

25.5.6. The provisions of sections 25.5.1 to 25.5.3 cease to apply in respect of a pension plan on the earlier of the following dates:

(1)  the date fixed in a writing giving instructions to that effect and sent to the pension committee by the person or body empowered to amend the plan; that date must be the date on which a fiscal year of the plan ends;

(2)  the date of the end of the plan’s first fiscal year beginning after 31 December 2014.

O.C. 345-2015, s. 2.

25.6. The Regulation respecting measures to reduce the effects of the financial crisis on pensions plans covered by the Supplemental Pension Plans Act (chapter R-15.1, r. 4) does not apply to a pension plan referred to in section 21.

O.C. 1013-2011, s. 5.

DIVISION VII FLEXIBLE RETIREMENT PLANS

O.C. 1290-99, s. 1.

26. A defined benefit or defined benefit-defined contribution pension plan that allows a member to pay, without a corresponding payment by the employer, a sum to be converted later into an ancillary benefit and which meets the requirements set forth in Bulletin 96-3, dated 25 November 1996, entitled “Flexible Pension Plans” published by Registered Plans Directorate of Canada Revenue Agency, is said to be a “flexible pension plan”. The sum thus paid and the benefit arising therefrom are, for the purposes of this division, respectively, an “optional ancillary contribution” and an “optional ancillary benefit” provided they are within the meaning given to the terms similarly named in the said Bulletin.

O.C. 1290-99, s. 1.

27. For the purposes of this division, the provisions of the Act that concern additional voluntary contribution, with the necessary modifications, apply to optional ancillary contributions.

O.C. 1290-99, s. 1.

28. A flexible pension plan that meets the conditions of this section is, with respect to optional ancillary contributions, exempted from the application of the following provisions of the Act:

(1)  section 47, so that, where a member or beneficiary has become entitled to a benefit under the pension plan, the optional ancillary contributions continue, subject to the provisions of section 45.1 of the Act, to bear interest at the rate referred to in section 44 of the Act until the said contributions are converted into optional ancillary benefits;

(2)  section 83, provided that the member is entitled, from the date on which a pension begins to be paid to him under the plan, to the formation of optional ancillary benefits, whose value shall be determined in accordance with section 33 of the Regulation, that arise from the said contributions credited to his account;

(3)  subparagraph 1 of the second paragraph of section 86 and subparagraph 1 of section 98 so that for the application of the other provisions of the said sections, the optional ancillary contributions are deemed to have been converted, to the highest value of the options available under the plan, into optional ancillary benefits on the day preceding, as the case may be, the death of the member, the date on which he ceased to be an active member or the date of the transfer application;

(4)  section 264, so that the said contributions are non-transferable and non-seizable to the same extent as member contributions.

O.C. 1290-99, s. 1; O.C. 1151-2002, s. 20.

29. In addition to the requirements prescribed in section 14 of the Act, the text of a flexible pension plan shall provide as follows:

(1)  the right of members to pay optional ancillary contributions to the plan as well as the conditions and time periods applicable to such right;

(2)  the nature of the optional ancillary benefits that the member may choose, the methods and time periods applicable to such choice as well as the method for calculating such benefits and the conditions applicable to their formation;

(3)  the rights of the member arising from the optional ancillary contributions that he has paid are limited to the value of the optional ancillary benefits which, under the provisions of the plan, are recognized for him.

The plan text shall also contain, on its title page or cover or within the introductory provisions of the plan, the following mention: “Flexible pension plan exempted from the application of certain provisions of the Supplemental Pension Plans Act”.

O.C. 1290-99, s. 1.

30. For the purposes of this division, section 87 of the Act shall be applied in such a way that the optional ancillary contributions not yet converted into optional ancillary benefits are deemed to have been converted on the day preceding the death of the member. This presumption shall, moreover, have the effect of resulting in the greatest increase in the member’s pension based on the options available under the plan. Furthermore, the pension payable to the member’s spouse shall be determined by supposing that the member was, before his death, receiving the pension resulting from the said conversion.

O.C. 1290-99, s. 1.

31. Subparagraph 2 of section 19 of the Act may not be applied to an amendment intended to exempt a plan from the application of the provisions of the Act referred to in section 28. Moreover, section 30 of the Act may not be applied to the registration of such amendment nor to the registration of a plan referred to in this division.

O.C. 1290-99, s. 1.

32. Any employer who is a party to a flexible pension plan shall undertake, in writing, to pay, in a lump sum, to each member who is his employee, a sum equal to the excess optional ancillary contributions that may not be refunded directly to the member from the pension fund, insofar as the provisions of the plan no longer allow the formation of benefits with all or part of the said contributions. The excess optional ancillary contributions are equal to the difference, on the date of the conversion of the optional ancillary contributions into optional ancillary benefits, between the value of the said contributions and the value of the benefits arising from an option of the member or the application of paragraph 3 of section 28 or section 30. The value of the optional ancillary benefits shall be calculated by using the assumptions referred to in section 33.

The employer’s undertaking referred to in the first paragraph extends to the member’s spouse insofar as, where excess optional ancillary contributions are included in the member’s benefits that may be partitioned or where there is a transfer under section 107 or 110 of the Act, the employer shall pay to the spouse, in completion of the sum owing to the spouse following a partition or transfer, a portion of those contributions pro rata to the value of the benefits allocated to the spouse with respect to the total value of the benefits that may be partitioned or transferred. In such case, the sum paid by the employer to the said spouse is determined in the manner provided for in the first paragraph, with the necessary modifications.

The undertaking referred to in the preceding paragraphs shall be sent to the pension committee, which shall attach a copy thereof to the application submitted to Retraite Québec, in accordance with section 24 of the Act, for the registration of a plan referred to in this section or an amendment intended to exempt a plan from the application of the provisions of the Act referred to in section 28. A copy of the undertaking as well as a notice mentioning the time limit provided for in subparagraph 3 of the first paragraph of section 29 and describing the risks related to the payment of optional ancillary contributions, particularly those resulting from the date on which retirement was taken and the member’s characteristics on that date as well as the interest rate used when the conversion or the transfer of the benefits took place, shall also be attached to the documents sent to the members and to the employees eligible for membership in accordance with section 111 of the Act. The said undertaking shall also mention that in the event of the member’s death, payment shall be made to his spouse, or in the absence of a spouse, to his successors. For the application of this section, the spouse of a member is the person who meets the conditions provided for in section 85 of the Act.

Subject to section 45.1 of the Act, the excess optional ancillary contributions shall bear interest, between the dates of their determination and their payment, at the rate applicable to additional voluntary contributions in accordance with section 44 of the Act. The member may request payment of the sum corresponding to the excess optional ancillary contributions from the date of their determination. Once the employer has made the payment required under this section, he notifies the pension committee in writing thereof. The balance of the contributions then becomes nil.

O.C. 1290-99, s. 1; O.C. 1151-2002, s. 21; O.C. 436-2004, s. 9.

33. The value of the optional ancillary benefits shall be calculated by using the assumptions referred to in section 67.4 of the Regulation respecting supplemental pension plans (chapter R-15.1, r. 6), applied taking into account the same rules and using the same type of mortality table.

The plan may however provide, in a case where the conversion is made otherwise than in applying subparagraph 3 of section 28, that the value referred to in the first paragraph is calculated by using the same assumptions but replacing, in the standard of practice, the reference to the second calendar month preceding the calculation date by a reference to any average of the rates for the period extending from the second to the twenty-fifth month preceding that date.

O.C. 1290-99, s. 1; O.C. 1151-2002, s. 22; O.C. 159-2007, s. 3; O.C. 1013-2011, s. 6.

33.1. The summary of the pension plan provided for in section 111 of the Act shall contain, in addition to the information provided for in that section or required by the Regulation respecting supplemental pension plans (chapter R-15.1, r. 6), a description of each of the subjects mentioned in the first paragraph of section 29 of the Regulation, with the exception of the calculation method and the conditions applicable to the formation of the benefits that the member may choose.

O.C. 1151-2002, s. 23.

33.2. For the purposes of the statements referred to in sections 35 to 36, the optional ancillary contributions are not considered to be additional voluntary contributions.

O.C. 1151-2002, s. 23.

34. (Revoked).

O.C. 1290-99, s. 1; O.C. 1151-2002, s. 24.

35. The first part of the annual statement referred to in section 112 of the Act and sent to an active member who has already made optional ancillary contributions shall contain, in addition to the information required by the Regulation respecting supplemental pension plans (chapter R-15.1, r. 6), the following information:

(1)  the optional ancillary contributions recorded separately to the account of the member in the course of the fiscal year as well as the accumulated total, from his joining the plan, of the said contributions with interest at the end of the said fiscal year;

(2)  where the member has already exercised options as to optional ancillary benefits, the nature of the benefits chosen;

(3)  where the circumstances warrant and at least once every 3 years, the excess optional ancillary contributions at the ending date of the fiscal year, determined taking into account the options exercised with respect to the pension benefits referred to in paragraph 2 and, where the member did not exercise any option with respect to optional ancillary benefits, by supposing that the member ceased to be an active member, that he exercised his transfer right on that date and that the optional ancillary contributions were converted at the optimum value of the options available under the plan.

O.C. 1290-99, s. 1; O.C. 1151-2002, s. 25; O.C. 436-2004, s. 10.

35.1. The first part of the annual statement provided for in section 112 of the Act, which is sent to a non-active member who has already made optional ancillary contributions, shall contain, in addition to the information required by the Regulation respecting supplemental pension plans (chapter R-15.1, r. 6) with respect to the statement sent to a non-active member, the following information:

(1)  where a member has exercised options related to the optional ancillary benefits, the nature of the benefits chosen;

(2)  where a member is entitled to a deferred pension, the total of the optional ancillary benefits entered separately to the member’s account, with interest accrued to the end of the fiscal year;

(3)  where the circumstances warrant and at least once every 3 years, the optional ancillary contributions at the ending date of the fiscal year, determined by taking into account the options exercised with respect to the benefits referred to in paragraph 1 and, where the member did not exercise any option related to the optional ancillary contributions, by supposing that such contributions were converted at the optimal value of the options available under the plan.

O.C. 1151-2002, s. 26.

35.2. The first part of the annual statement provided for in section 112 of the Act, which is sent to a beneficiary whose benefits are derived from those of a member who has made optional ancillary contributions, must contain, in addition to the information required by the Regulation respecting supplemental pension plans (chapter R-15.1, r. 6) with respect to the statement sent to a beneficiary, the information provided for in paragraph 3 of section 35.1.

O.C. 1151-2002, s. 26.

36. The statement provided for in the first paragraph of section 113 of the Act that is sent to a member who has already made optional ancillary contributions shall contain, in addition to the information required under the Regulation respecting supplemental pensions plans (chapter R-15.1, r. 6), the following information:

(1)  the information provided for in paragraphs 1 and 2 of section 35 that is related to the period from the end of the fiscal year covered by the last statement sent to the affected member to the date on which he ceased to be an active member;

(2)  the excess optional ancillary contributions, if any, at the date on which a member ceases to be an active member, determined by taking into account the options exercised by him with respect to the optional ancillary contributions, by supposing that he exercised his transfer right at the date on which he ceased to be an active member and that such contributions were converted at the optimal value of the options available under the plan, with a mention that a sum equal to the said excess optional ancillary contributions must be paid by the employer pursuant to the written undertaking provided for in section 32.

O.C. 1290-99, s. 1; O.C. 1151-2002, s. 27.

37. For the purposes of section 36.1 of the Regulation respecting supplemental pension plans (chapter R-15.1, r. 6), a member’s aggregate benefits shall include excess optional ancillary contributions accrued during the period of a member’s membership, such benefits to be treated as capital benefits, reduced by any sum paid by the employer pursuant to the second paragraph of section 32 and determined by supposing that the member exercised his transfer right at the end of that period and that the contributions were converted at the optimal value of the available options under the plan are included in the aggregate benefits of a member.

O.C. 1290-99, s. 1; O.C. 1151-2002, s. 28; O.C. 1013-2011, s. 7.

38. A flexible pension plan may provide that the member contributions made by a member prior to the date of registration of the amendment referred to in section 31 are deemed to be optional ancillary contributions insofar as such contributions were made for the purpose of constituting optional ancillary benefits and the member consented in writing to his contributions being so considered. Such an amendment shall also be subject to Retraite Québec’s authorization, as required under section 20 of the Act.

O.C. 1290-99, s. 1; O.C. 159-2007, s. 4.

DIVISION VIII CONNECTED PENSION PLANS

O.C. 1151-2002, s. 29.

39. This division applies only to connected pension plans, that is, pension plans to which the same employer is party and which contain the stipulation provided for in section 41.

A defined contribution plan may be considered to be a connected pension plan only where the employer party to it is also party to a defined benefit or defined benefit-defined contribution plan that contains the stipulation provided for in section 41.

O.C. 1151-2002, s. 29.

40. In this division, “period of continuous membership” means the period included between the date on which a member joins a connected pension plan to which the employer is party, unless such membership immediately follows the member’s cessation of active membership in another connected plan to which the same employer is party, provided the member does not immediately join another, similar plan. The member’s period of continuous membership ends, however, when he changes employer, except in the event of a substitution authorized by Retraite Québec.

O.C. 1151-2002, s. 29.

41. A connected pension plan shall clearly state, under an appropriate heading, that a member is entitled, at the date on which his period of continuous membership ends, to the pension benefit to which he would have been entitled if his active membership had ended at that date, determined in accordance with the following rules:

(1)  also taken into consideration for the determination of a member’s entitlement to pension benefits and ancillary benefits provided for under the plan is recognized service or the period of active membership determined under the terms of any other connected pension plan that the member joined during his period of continuous membership;

(2)  the member shall benefit from amendments to the plan introduced between the date on which his active membership ended and the date on which his continuous membership ended that increase pension benefits or ancillary benefits offered to active members belonging to the category of workers to which he belonged immediately prior to the first of those dates;

(3)  where a pension plan provides that the normal pension is determined according to the progression of a member’s remuneration up to the end of his active membership, the pension benefit to which the member is entitled at the date on which his period of continuous membership ends is determined according to the progress of his remuneration up to that date.

The plan shall also state under that same heading the name of any pension plan to which it is connected.

O.C. 1151-2002, s. 29.

42. The following provisions of the Act apply to a connected pension plan, subject to the following changes:

(1)  section 60, by adding the words “on the date on which his period of continuous membership ends” after the word “benefit”, in paragraph 1 of the first paragraph and replacing the words “where the member dies before becoming entitled to a pension benefit” with the words “where the member’s death ends his period of continuous membership”, in subparagraph 2 of the first paragraph;

(2)  section 60.1, by replacing the words “who ceases to be an active member” with the words “whose period of active membership ends”, in the first paragraph, the words “the date the member ceases to be an active member” with the words “the date the member’s period of continuous membership ends”, in the first sentence of the second paragraph, the words “the month the member ceases to be an active member” with the words “the month the member’s period of continuous membership ends”, in the second sentence of the second paragraph and by replacing the third paragraph with the following paragraph:

Where the member’s death ends his period of continuous membership, the value of the additional pension benefit shall be determined by supposing that the said period ended on the day of death for a reason other than death.;

(3)  section 61, by replacing the word “vesting” with the words “the period of the member’s continuous membership ends”;

(4)  section 66, by replacing the words “who ceases to be an active member” with the words “whose period of continuous membership ends”, and the words “in which the member ceases to be an active member” and “the date on which the member ceased to be an active member” with the words “the date on which his period of continuous membership ended”;

(5)  section 66.1, by replacing the words “who has ceased to be an active member and whose period of continuous employment has” with the words “whose period of continuous membership and period of continuous employment have”;

(6)  section 67, by replacing the words “who ceases to be an active member” with the words “whose period of continuous membership has ended”;

(7)  the second paragraph of section 71, by adding, after the words “continuous employment,” the words “provided his period of continuous membership has ended”;

(8)  section 86, by replacing paragraphs 1 and 2 of the first paragraph with the following paragraphs:

“(1)  where the members death is subsequent to the date his period of continuous membership ends, to the value of any pension to which he was entitled prior to his death;

“(2)  where the member’s death ends his period of continuous membership, to the value of the deferred pension to which he would have been entitled if his period of continuous membership had ended on the day of death for a reason other than death.”;

(9)  subparagraph 2 of the second paragraph of section 99, by replacing the words “the member ceased to be an active member” by the words “the member’s period of continuous membership has ended”;

(10)  subparagraph 3 of the second paragraph of section 99, by replacing the words “who ceased to be an active member,” with the words “whose period of continuous membership has ended”;

(11)  section 102, by replacing the words “who ceases to be an active member” with the words “whose period of continuous membership has ends”;

(12)  section 113, by replacing the words “that a member ceased to be an active member,” with the words “that a member’s period of continuous membership has ended,”.

O.C. 1151-2002, s. 29.

43. A member of a connected pension plan who, before his period of continuous membership ends, is affected by the withdrawal of an employer party to the plan or by termination of the plan is entitled to the pension benefit to which he would have been entitled if his period of continuous membership had ended on the date of that withdrawal or termination.

O.C. 1151-2002, s. 29.

44. With respect to a member of a connected pension plan, sections 15.0.2 and 15.0.3 of the Regulation respecting supplemental pension plans (chapter R-15.1, r. 6) shall be applied by taking into account the date on which the member’s period of continuous employment ends, instead of the date on which he ceases to be an active member.

O.C. 1151-2002, s. 29.

45. In applying sections 36.1 and 37 of the Regulation respecting supplemental pension plans (chapter R-15.1, r. 6), the aggregate benefits of a member of a connected pension plan are determined, where his period of continuous membership is in effect at the date of the actuarial valuation, by supposing that it ended on such date.

O.C. 1151-2002, s. 29; O.C. 1052-2012, s. 2.

46. The annual statement provided for in section 112 of the Act, which is sent to a member whose active membership in a connected pension plan has ceased but whose period of continuous membership has not ended shall contain all the information that the statement sent to an active member must contain, provided, where the statement must indicate the value of the member’s benefits, the value indicated shall be the value that the member could have transferred at the end of the last fiscal year if his period of continuous membership had ended on that date.

From the end of the member’s period of continuous membership, the first part of the annual statement that is sent to him shall be in conformity with section 59 of the Regulation respecting supplemental pension plans (chapter R-15.1, r. 6).

O.C. 1151-2002, s. 29.

47. The statement referred to in the first paragraph of section 113 of the Act, which the pension committee must provide when it is informed that a member’s period of continuous membership has ended shall contain the information provided for in section 58 of the Regulation respecting supplemental pension plans (chapter R-15.1, r. 6) and, where the circumstances warrant, in section 36 of this Regulation, it being understood that for the application of the said provisions, the date to be taken into account shall be the date on which the member’s period of continuous membership ended, instead of the date on which he ceased to be an active member.

O.C. 1151-2002, s. 29.

DIVISION IX

(Revoked)

O.C. 1098-2006, s. 1; O.C. 541-2010, s. 57.

48. (Revoked).

O.C. 1098-2006, s. 1; O.C. 541-2010, s. 57.

49. (Revoked).

O.C. 1098-2006, s. 1; O.C. 541-2010, s. 57.

50. (Revoked).

O.C. 1098-2006, s. 1; O.C. 541-2010, s. 57.

51. (Revoked).

O.C. 1098-2006, s. 1; O.C. 541-2010, s. 57.

52. (Revoked).

O.C. 1098-2006, s. 1; O.C. 541-2010, s. 57.

53. (Revoked).

O.C. 1098-2006, s. 1; O.C. 541-2010, s. 57.

54. (Revoked).

O.C. 1098-2006, s. 1; O.C. 541-2010, s. 57.

55. (Revoked).

O.C. 1098-2006, s. 1; O.C. 541-2010, s. 57.

56. (Revoked).

O.C. 1098-2006, s. 1; O.C. 541-2010, s. 57.

57. (Revoked).

O.C. 1098-2006, s. 1; O.C. 541-2010, s. 57.

58. (Revoked).

O.C. 1098-2006, s. 1; O.C. 541-2010, s. 57.

59. (Revoked).

O.C. 1098-2006, s. 1; O.C. 541-2010, s. 57.

60. (Revoked).

O.C. 1098-2006, s. 1; O.C. 541-2010, s. 57.

61. (Revoked).

O.C. 1098-2006, s. 1; O.C. 541-2010, s. 57.

62. (Revoked).

O.C. 1098-2006, s. 1; O.C. 541-2010, s. 57.

63. (Revoked).

O.C. 1098-2006, s. 1; O.C. 541-2010, s. 57.

64. (Revoked).

O.C. 1098-2006, s. 1; O.C. 541-2010, s. 57.

DIVISION X MEMBER-FUNDED PENSION PLANS

O.C. 159-2007, s. 5.

§ 1 . — General provisions

O.C. 159-2007, s. 5.

64.1. In this division, the Act as it read on 31 December 2009 applies and any reference to a provision of the Act is deemed to be a reference to a provision of the Act as it read on 31 December 2009.

O.C. 1052-2012, s. 3.

65. This division refers to a pension plan called a “member-funded pension plan”, which has the following characteristics:

(1)  it is a defined benefit pension plan that sets in advance the employer contributions and the normal pension or their calculation method;

(2)  it came into effect after 15 March 2007;

(3)  it provides that the cost of the plan’s commitments, less the employer contribution fixed in the plan, is the sole responsibility of the plan’s active members;

(4)  it contains a provision whose effect is to prevent the employer who is party to the plan, or in the case of a multi-employer plan, even not considered as such under section 11 of the Act, the employers jointly or any one of them, from directly or indirectly amending or terminating the plan unilaterally;

(5)  it provides who may terminate the plan and under what conditions;

(6)  it provides that the employer may, for the purpose of respecting taxation rules, appropriate surplus assets to the payment of the employer contribution;

(7)  it may not contain provisions that, in a defined benefit pension plan, are identical to those of a defined contribution plan;

(8)  it stipulates that the members and beneficiaries alone are entitled to any surplus assets determined upon termination of the plan and that such assets shall be distributed among them pro rata to the value of their benefits;

(9)  it stipulates that the members and beneficiaries affected by the withdrawal of an employer party to a multi-employer plan have the same rights with respect to the surplus assets allocated to their benefits group as the members and beneficiaries affected by the termination;

(10)  it provides a rule to determine the date of withdrawal of an employer party to a multi-employer plan.

O.C. 159-2007, s. 5.

66. The following plans are outside the scope of this division:

(1)  a pension plan in which the remuneration used for the purpose of calculating a member’s pension corresponds to the average of his last remunerations;

(2)  a pension plan in which the remuneration used for the purpose of calculating a member’s pension corresponds to his highest remunerations during a specified number of years;

(3)  a pension plan under which the pension is automatically increased by using for its determination an index or rate provided for in the plan;

(4)  an insured pension plan.

O.C. 159-2007, s. 5.

67. A member-funded pension plan may not be validly established by an amendment to a pension plan already in force whose purpose would be to convert such plan into a member-funded pension plan.

An amendment to a member-funded pension plan may not have the effect of converting such plan into a pension plan not belonging to that category of plans.

O.C. 159-2007, s. 5.

§ 2 . — Rules and conditions for exemptions

O.C. 159-2007, s. 5.

68. Member-funded pension plans are exempted from the following provisions of the Act:

— Pension plan – section 7;

— Establishment and effective date – subparagraph 16 of the second paragraph of section 14;

— Contributions – sections 37, 39, 41, 42 and 44;

— Refunds and pension benefits – sections 60, 60.1 and 78 as well as subparagraph 2 of the first paragraph of section 93;

— Transfers of benefits and assets – sections 101 and 106;

— Funding and solvency – sections 130 to 133, 140 and 142 to 146;

— Appropriation of surplus assets to the payments of employer contributions – sections 146.4 to 146.9;

— Division and merger – section 196, with the exception of the third paragraph;

— Liquidation of the benefits of members and beneficiaries – paragraphs 2 to 4 of section 200, section 207.5, the first paragraph of section 210.1, the second paragraph of section 224, sections 228 to 230, 230.1, 230.2 to 230.8 and 240.2.

O.C. 159-2007, s. 5.

69. The following provisions of the Act apply to a member-funded pension plan, with the changes mentioned below:

(1)  section 38, by striking out the words “, as the case may be,”;

(2)  section 61, by replacing the first paragraph with the following paragraph:

“61. The value of a member’s pension benefits shall be determined at the date of vesting, according to the actuarial assumptions and methods prescribed by regulation.”;

(3)  section 69.1, by replacing subparagraph 3 of the first paragraph with the following paragraph:

“(3)  the value assigned to his benefits for the purposes of their payment by supposing that he ceases to be an active member and exercises his right to the refund or transfer of his benefits on the date on which he applies for the payment of the benefit;”;

(4)  section 81, by replacing the second paragraph with the following paragraph:

“The actuarially equivalent pension shall be determined on the basis of the actuarial assumptions referred to in section 61 that, on the date on which the member reached the normal retirement age, were used to determine the value of the pension benefits to which entitlement had been vested on that date.”;

(5)  section 82.1, by replacing the third paragraph with the following paragraph:

“Values are established on the date on which payment of the disability pension is interrupted, according to the actuarial assumptions and methods referred to in section 61 that, on the said date, were used to determine the value of pension benefits.”;

(6)  section 86, by replacing subparagraph 2 of the first paragraph with the following subparagraph:

“(2)  if the member was not entitled to a pension before his death, the value to which he would have been entitled if he had ceased to be an active member on the day of his death for a reason other than his death and had then exercised his right to the refund or transfer of his benefits.”;

(7)  section 98, by striking out the words “to which section 60 applies and” each time they appear in subparagraph b of subparagraph 2 and subparagraph 4 of the first paragraph;

(8)  section 122, by adding, after the first paragraph, the following paragraphs:

“The funding method must also contain an assumption for the indexation of the pensions of all the plan’s members and beneficiaries on 1 January of each year, according to the increase in the seasonally unadjusted Consumer Price Index for Canada, published by Statistics Canada for each month during the 12-month period ending on 31 December of the preceding year, up to a maximum of 4%.

This requirement also applies to contributions used to redeem years of service.

The pension plan shall specify whether or not the pensions of all the retirees are insured by an insurer. Where they are insured, the plan shall indicate whether the assumption for indexation of the pensions applies only until retirement or continues to apply thereafter.

The pension committee that applies for registration of an amendment to provide that indexation of the pensions applies only until retirement, shall so inform the retirees by means of the notice provided for in paragraph 1 of section 26 of the Act.”.

(9)  section 123, by inserting, in the second line of subparagraph 1, after the words “the valuation”, the words “or in the form of a fixed amount for each active member”;

(10)  section 134, by replacing, each time that it appears in the first and third paragraphs, the number “133” with the number and words “91 of the Regulation respecting the exemption of certain categories of pension plans from the application of provisions of the Supplemental Pension Plans Act (chapter R-15.1, r. 7)”;

(11)  the title of chapter X.1 and sections 146.1 to 146.3, by replacing, each time that it appears therein, the word “employer” with the word “member”;

(12)  section 198:

(a)  by replacing the second sentence of the second paragraph with the following sentence: “The date may not be later than the end of the fiscal year that follows the one in which a final contribution is required with respect to the members attached to the employer.”;

(b)  by adding, after the third paragraph, the following paragraph: “The holder of an insured annuity purchased directly from an insurer following an employer’s withdrawal from a multi-employer plan ceases to be a member of the plan.”;

(13)  section 202:

(a)  by replacing, at the end of the second paragraph, the words “, with the authorization of and subject to the conditions determined by the Régie, at the date of the next full actuarial valuation of the plan” with the words “on the date and subject to the conditions fixed by the Régie”;

(b)  by striking out the third paragraph;

(14)  section 204, by replacing the first paragraph with the following paragraph:

“204. The person or body empowered to terminate the pension plan may do so only by means of a written termination notice sent to the affected members and beneficiaries, to every certified association representing members, to the employer, to the pension committee and, where applicable, to the insurer.”;

(15)  section 212, by replacing, in the portion of the first paragraph that precedes subparagraph 1, the words “the pension benefits to which section 60 applies” with the words “pension benefits”;

(16)  section 226, by inserting, in the first line, after the word “retirement”, the words “or upon the withdrawal of an employer who is party to a multi-employer pension plan”.

O.C. 159-2007, s. 5.

70. The member-funded pension plan is exempted from the application of section 52 of the Regulation respecting supplemental pension plans (chapter R-15.1, r. 6).

O.C. 159-2007, s. 5.

71. The following provisions of the aforementioned Regulation apply to the member-funded pension plan with the changes mentioned below:

(1)  section 4:

(a)  by replacing subparagraph 6 of the first paragraph with the following subparagraph:

“(6)  the member contribution required under the plan, if such contribution is greater than the contribution provided for in sections 79 and 92 of the Regulation respecting the exemption of certain categories of pension plans from the application of provisions of the Supplemental Pension Plans Act (chapter R-15.1, r. 7);”;

(b)  by replacing, in subparagraph 15 of the first paragraph, the words and numbers “sections 133, 134 or 140 of the Act” with the words and numbers “section 134 of the Act and sections 91 or 92 of the Regulation respecting the exemption of certain categories of pension plans from the application of provisions of the Supplemental Pension Plans Act;”;

(c)  by replacing subparagraph 19 of the first paragraph with the following:

“(19)  a description of the contribution adjustments resulting from the application of the second paragraph of section 80 of the Regulation respecting the exemption of certain categories of pension plans from the application of provisions of the Supplemental Pension Plans Act;”;

(d)  by striking out the second paragraph;

(2)  section 15.3:

(a)  by replacing the first and second paragraphs with the following paragraph:

“15.3. Where the payment of the early benefit referred to in section 69.1 of the Act is made from pension plan benefits accumulated by the member that are not referred to in section 15.1, the pension committee shall determine, at the payment date, a pension amount equal to “M” in the following formula:

“

R x p = M
    -
    v

““R” is equal to the normal pension that, determined according to the value of the member’s benefits at the payment date, would have been payable to the member at the normal retirement age in accordance with the conditions and characteristics provided for in the plan for such pension;

““p” is equal to the pension benefit paid;

““v” is equal to the value of the member’s benefits determined in accordance with subparagraph 3 of the first paragraph of section 69.1 of the Act.”;

(b)  by replacing, each time that it appears in the third paragraph, the word “second” with the word “first”;

(3)  section 48, by replacing the first paragraph with the following paragraph:

“Interest calculated at the rate of return obtained on the investment of the plan’s assets, less investment and administration costs, must be added to the amount granted to the spouse.”;

(4)  section 54, by replacing the first paragraph with the following:

“54. The pension committee must, where no pension is being paid to the member at the date of execution of the partition or transfer of pension amounts, determine at such date an amount equal to “M” in the following formula:

“

A x c = M
    -
    p

““A” is equal to the normal pension that, determined according to the value of the member’s benefits at the date of execution of the partition or transfer, would have been payable to the member at the normal retirement age in accordance with the conditions and characteristics provided for in the plan for such pension;

““c” is equal to the sum that corresponds to the benefits granted to the spouse following the partition or transfer;

““p” is equal to the value taken into consideration for the purposes of the partition or transfer of the member’s benefits.

“The pension committee must keep a record of that amount.”;

(5)  section 56.0.3, by replacing the first paragraph with the following:

“56.0.3. Where the benefits attributed to the spouse are paid from the benefits of the member that are pension benefits within the meaning of section 33 and no pension is being paid to the member at the date on which the seizure is effected, the pension committee shall determine at that date a pension amount equal to “M” in the following formula:

“

R x s = M
    -
    v

““R” is equal to the normal pension that, determined according to the value of the member’s benefits at the date on which the seizure is effected, would have been payable to the member at the normal retirement age in accordance with the conditions and characteristics provided for in the plan for such pension;

““s” is equal to the amount paid in execution of the seizure;

““v” is equal to the value of the member’s benefits taken into consideration for the purposes of the seizure.

“The pension committee must keep a record of that amount.”;

(6)  section 56.1:

(a)  by striking out paragraphs 1 and 6;

(b)  by adding, at the end, the following paragraph:

“It must also indicate:

“(1)  that the plan is exempted from several provisions of the Act;

“(2)  that the cost of the plan’s commitments, less the employer contribution, shall be borne by the plan’s active members;

“(3)  that the benefits of the members and beneficiaries of the plan may be indexed only if the plan is fully funded and solvent;

“(4)  that the accumulated surplus assets at the termination of the plan is entirely allocated to the plan’s members and beneficiaries and distributed among them pro rata to the value of their benefits.”;

(7)  section 57, by replacing subparagraph 1 of the second paragraph with the following subparagraph:

“(1)  the value of the member’s benefits at the end of that fiscal year as well as the value that he would have been able to transfer taking into account the plan’s degree of solvency at that date, accompanied with a mention that the information is provided for information purposes and that the value of the benefits is subject to large variations by reason in particular of fluctuations in interest rates, variations in the degree of solvency as well as the payment conditions of the pension benefits;”;

(8)  section 58:

(a)  by striking out subparagraph g of paragraph 4;

(b)  by replacing paragraph (9) with the following paragraph:

“(9)  the pension plan’s degree of solvency that would have been taken into account for payment of the member’s benefits if he had exercised his right to the refund or transfer of his benefits at the date on which he ceased to be an active member, accompanied with a mention that the plan was fully funded or partially funded, as the case may be, at the date of the last actuarial valuation of the entire plan;”;

(9)  section 59, by replacing subparagraph 1 of the second paragraph with the following subparagraph:

“(1)  the value, at the end of the fiscal year, of the member’s benefits as well as the value that he would have been able to transfer taking into account the plan’s degree of solvency at that date, accompanied with a mention that the information is provided for information purposes and that the values are subject to large variations by reason in particular of fluctuations in interest rates, variations in the degree of solvency as well as the payment conditions of the pension benefits;”;

(10)  section 59.0.1, by striking out paragraph 6;

(11)  section 59.0.2:

(a)  by replacing subparagraph 1 of the first paragraph with the following subparagraph:

“(1)  the degree of solvency of the pension plan determined at the earlier of the date of the last actuarial valuation of the whole plan or the date of the end of the last completed fiscal year of the plan, and, where the degree is less than 100%, the measures taken to bring it up to 100;%;”;

(b)  by replacing each time that they appear in subparagraph 5 of the first paragraph and in the second paragraph, the words “employer contribution” with the words “member contributions”.

O.C. 159-2007, s. 5.

72. For the purposes of partition, transfer and seizure of the member’s benefits, the value that must be considered to be the value of the member’s total benefits or the value of the benefits accumulated during marriage is equal to the product of the value determined in accordance with the pertinent provisions of sections 35.2, 37, 39 and 41 to 45 of the Regulation respecting supplemental pension plans (chapter R-15.1, r. 6) multiplied by the plan’s degree of solvency at the date at which the member’s benefits are determined. Only the value resulting from the operation prescribed in this section must be indicated in the first part of the statement provided for in section 35 of the Regulation.

O.C. 159-2007, s. 5.

§ 3 . — Specific rules

O.C. 159-2007, s. 5.

73. The notice provided for in section 16 of the Act must mention that the cost of the plan’s commitments, less the employer contribution, will be borne by the plan’s active members.

O.C. 159-2007, s. 5.

74. The application for registration filed pursuant to section 24 of the Act must be accompanied with a written declaration from each certified association representing workers eligible for plan membership or active plan members acknowledging that such association, acting on behalf of those it represents, gives its consent to the obligations incumbent on each such worker and member under, as the case may be, the plan or the amendment.

The first paragraph does not apply in the following cases:

(1)  the pension committee attests that it has obtained the acknowledgment of each association and that the acknowledgment may, on request, be filed with Retraite Québec;

(2)  the amendment has been made mandatory by a new legislative or regulatory provision giving no latitude;

(3)  the amendment results from the application of section 199 of the Act or section 94.

O.C. 159-2007, s. 5.

75. Subject to taxation rules, a pension plan may include, workers represented or not represented by a certified association.

A pension committee intending to apply for registration either of a plan or of an amendment that increases plan commitments shall give 40 days advance notice in writing to each non-represented worker.

The prior notice of an application for registration of a plan shall mention that the cost of the plan’s commitments, less the employer contribution, shall be borne by the plan’s active members, that the benefits of the members and beneficiaries may be indexed provided the plan is fully funded and solvent and that the accumulated surplus assets at the plan’s termination are, in whole, allocated to the members and beneficiaries of the plan and distributed among them pro rata to the value of their benefits. The prior notice of an application for registration of an amendment shall contain the information provided for in subparagraph 1 of the first paragraph of section 26 of the Act.

Such notices shall likewise inform the interested parties that they may, within 30 days following receipt of notice, make known, in writing, to the pension committee their opposition to the obligations incumbent on them under, as the case may be, the plan or the amendment.

Retraite Québec may register a plan or an amendment only where the application for registration is accompanied with a written declaration from the pension committee attesting that less than 30% of the workers referred to in the first paragraph expressed their opposition in accordance with the third paragraph.

This section does not apply in the case of an amendment referred to in subparagraph 2 or 3 of the second paragraph of section 74.

O.C. 159-2007, s. 5.

76. Retraite Québec may not register a pension plan referred to in this division or an amendment to such plan unless the report referred to in subparagraph 4 of the second paragraph of section 24 of the Act shows, as the case may be, that the pension plan for which an application for registration is made is fully funded and solvent on the date it comes into force or that the coming into force of the amendment for which an application for registration is made will not result in an insufficiency of assets in the fund of the plan that would prevent the plan from remaining fully funded and solvent.

This prohibition does not apply where the amendment is made necessary by the application of a new legislative or regulatory provision giving no latitude.

O.C. 159-2007, s. 5.

77. The member contribution is the contribution that an active member is required to pay or the amount he elects to pay with a concurrent contribution by the employer.

The employer contribution is the contribution that the employer is required to pay.

An additional voluntary contribution is a sum that a member contributes and that is not used to finance the benefits provided for under the pension plan.

Additional voluntary contributions are, until retirement, credited to an account from which all other types of contributions are excluded.

O.C. 159-2007, s. 5.

78. The pension committee shall inform the active members of any change in the amount of the member contribution by providing to each member a written notice indicating the effective date of the change as well as the new contribution or the method for its calculation. The notice shall be provided no later than 30 days following the date on which collection of the new contribution begins.

O.C. 159-2007, s. 5.

79. An active member shall, in each fiscal year of the plan, pay the member contribution that, when added to the employer contribution and to the contributions of the other active members, is equal to the current service contribution determined in accordance with sections 124 and 125 of the Act.

A member’s member contribution shall likewise include his share of any amortization amount determined in application of section 90 and of the sum payable to cover any amount determined pursuant to subparagraph 4 of the second paragraph of section 137 of the Act.

However, if the person or body who has the power to amend the plan so decides, the change in the member contribution related to an amortization amount determined in accordance with section 90 or in application of subparagraph 4 of the second paragraph of section 137 of the Act may be postponed, at the latest, to the date that is 12 months after the date of the actuarial valuation pertaining thereto. Where an increase is postponed, the sum of the contribution that would otherwise have been paid in the meanwhile, increased by the interest referred to in section 48 of the Act, may be divided uniformly over the remainder of the first 5 years which follow the valuation date.

O.C. 159-2007, s. 5.

80. The member contribution is paid in equal instalments, according to the periodicity provided for under the plan. However, if they relate to the current service contribution, such instalments may represent an hourly rate or a proportion of the remuneration. The rate or proportion shall be uniform unless it is established by reference to a variable authorized by Retraite Québec.

Where the member contribution is not determined at the beginning of the fiscal year, the member shall, until an actuarial valuation report is transmitted to Retraite Québec, continue to pay the contribution fixed for the preceding fiscal year. If the contribution so paid is less than what should have been paid according to the report, the portion still to be paid may be distributed uniformly over the period remaining until the date of the next actuarial valuation required in accordance with paragraph 3 of section 118 of the Act, plus, where applicable, the interest referred to in section 48. The amount of the contribution may also be adjusted if the contribution that should have been paid according to the report is less than what was paid.

O.C. 159-2007, s. 5.

81. The employer contribution shall be paid in as many equal monthly payments as there are months in the fiscal year of the plan, and not later than the last day of the month that follows each of these months. The monthly payments may, however, represent an hourly rate, a proportion of the remuneration or a percentage of the total payroll for the active members; the rate, proportion or percentage shall be uniform unless it is established by reference to a variable authorized by Retraite Québec.

O.C. 159-2007, s. 5.

82. Every contribution bears interest, from the first day of the month that follows the month during which it should have been paid into the pension fund or to the insurer, at the rate of return derived from the investment of the plan assets, less investment expenses and administration costs, or, if the plan so provides and to the extent that the contribution relates to refunds or pension benefits that remain insured, at the monthly rate of return on personal 5-year term deposits with chartered banks, as compiled by the Bank of Canada.

O.C. 159-2007, s. 5.

83. Where a member who ceases to be an active member exercises his right to a refund or to the transfer of his benefits the value of his benefits is equal to the greater of the following amounts:

(1)  the value of the pension benefit to which he is entitled;

(2)  the value of a pension payable to the member and determined in accordance with the second paragraph of section 60.1 of the Act.

The same rule shall apply to the member’s spouse or assign who exercises his right to the benefit provided for in the first paragraph of section 86 of the Act.

Except in the event of plan termination or withdrawal of an employer party to a multi-employer plan, payment of benefits is calculated as the product of the value of the benefits thus determined multiplied by the plan’s degree of solvency.

Such value may not be less than the following sums, with accrued interest:

(1)  the sum of the amounts credited to the member following transfers, whether or not referred to in section 98 of the Act;

(2)  the sums paid by the member under an option giving him entitlement to a benefit by reason of service in respect of a period of work during which no employer contribution was credited to him;

(3)  the total of the contributions made by him.

All additional voluntary contributions shall be refunded, with interest, and without regard to the pension plans degree of solvency.

The second paragraph of section 5 of the Act not withstanding, the plan may not provide for provisions more advantageous than those provided for in this section.

O.C. 159-2007, s. 5.

84. The plan’s degree of solvency taken into account for the purposes of applying section 83 is the most recent of the following: the degree as determined in the course of the last actuarial valuation of the plan, the degree established at the end of the plan’s last complete fiscal year or the degree determined according to the periodicity provided for under the plan. The most recent degree of solvency shall be determined at the day on which the pension committee receives an application to exercise the rights referred to in section 83.

The pension committee shall establish or cause to be established the plan’s degree of solvability at the end of each of the plan’s fiscal years ending on a date other than the date of a valuation required pursuant to paragraph 3 of section 118 of the Act or at the date fixed in accordance with the established periodicity where such date precedes the ending date of a fiscal year provided for under the plan. For this purpose, the actuary responsible for preparing the report relating to an actuarial valuation required pursuant to paragraph 3 of section 118 of the Act shall define in the report a method which, taking into account the return obtained on the investment of the plan’s assets and the change in the valuation rate, will allow the summary establishment of the degree of solvency at any time prior to the date of the next such valuation.

O.C. 159-2007, s. 5.

85. Except where an amendment has been made mandatory by the application of a new legislative or regulatory provision giving no latitude, a plan amendment that increases the plan’s commitments may not come into force unless the plan remains fully funded and solvent once the commitments resulting from the amendment are taken into account.

O.C. 159-2007, s. 5.

86. A pension plan may, subject to section 85, be amended so that the pension of each of the members and beneficiaries is adjusted according to the rate of cumulative increase in the seasonally unadjusted All-Items Consumer Price Index for Canada published by Statistics Canada for the 36-month period ending on the date of the last actuarial valuation of the whole plan or, if that date does not correspond to the end of a month, at the end of the month preceding that date. However, the annualized adjustment rate cannot be less than 0% or greater than 4%.

However, where the pension plan under which retirees’ pensions are insured and the assumption thereunder for indexation of the pensions of the aggregate benefits of the members and beneficiaries of the plan is made on the basis of funding based on indexation of the pensions until retirement, the first paragraph applies only to the benefits of the non-retired members.

The amendment provided for in the first and second paragraphs may not come into force on a date prior to the date of the last actuarial valuation of the whole plan or more than one year later than the date of that valuation.

Except where an amendment provided for in the first and second paragraphs comes into force on the date of the last actuarial valuation of the whole plan or thereafter:

(1)  no other amendment increasing the benefits of the members or beneficiaries may be made to the plan;

(2)  no portion of the plan’s surplus assets may be used to pay the member contributions.

The second paragraph of section 5 of the Act notwithstanding, no amendment may be made to the plan unless in conformity with the provisions of this section.

O.C. 159-2007, s. 5.

87. An amendment to a pension plan whose purpose is to adjust the members’ and beneficiaries’ benefits in accordance with the first and second paragraphs of section 86 applies to amounts determined in accordance with sections 15.3, 54 and 56.0.3 of the Regulation respecting supplemental pension plans (chapter R-15.1, r. 6).

O.C. 159-2007, s. 5.

88. Every period of a member’s credited service shall be taken into account for the purposes of calculating the pension payable to the member.

O.C. 159-2007, s. 5.

89. Every sum transferred to the pension plan, even otherwise than under chapter VII of the Act, shall be converted, at the date of the transfer, into a normal pension amount, on the basis of the actuarial assumptions used to verify the plan’s funding for the purposes of the plan’s most recent actuarial valuation.

The value of benefits transferred out of the plan shall be determined in accordance with sections 83 and 84.

O.C. 159-2007, s. 5.

90. The amortization amounts to be paid in connection with an unfunded actuarial liability shall, for each fiscal year or part of a fiscal year of the pension plan included in the amortization period, be expressed either in the form of a uniform percentage of each active members remuneration as determined on the basis of the total anticipated payroll for the active members or in the form of a uniform sum for each active member determined on the basis of the anticipated number of active members.

For the application of the first paragraph, the provisions related to the total payroll and the number of active members are the same as those used to verify the plan’s funding for the purposes of the last actuarial valuation of the plan.

O.C. 159-2007, s. 5.

91. Where the member contribution provided for under the plan is greater than that required pursuant to section 79, the excess thereof may serve to reduce, in the following order, the amounts remaining to be paid in connection with:

(1)  any amount determined pursuant to subparagraph 4 of the second paragraph of section 137 of the Act;

(2)  any technical actuarial deficiency.

(3)  any improvement unfunded actuarial liability.

The reduction must, where applicable, be made at the time of the first actuarial valuation of the whole pension plan that follows the payment of excess contributions.

If the excess is insufficient to eliminate an unfunded liability or an amount referred to in the first paragraph, the reduction shall be applied proportionately to each amount remaining to be paid. In addition, if there is more than one liability or amount, the reduction shall be applied from the earliest to the most recent.

O.C. 159-2007, s. 5.

92. Any amount determined pursuant to subparagraph 4 of the second paragraph of section 137 of the Act shall, within 5 years after the date of the actuarial valuation, be paid into the pension fund by the active members.

Section 128 and the first and second paragraphs of section 129 of the Act as well as section 81 of the Regulation apply, with the necessary modifications and as the case may be, to the determination or payment of such amount. Unless the pension plan sets a higher interest rate, any amount so determined and not paid into the pension fund bears interest, from the last day of the month following that for which it should have been paid, at the rate of return of the pension fund.

Such amount may be used to reduce proportionately and in accordance with section 91 the amortization amounts which, 5 years after the date of the actuarial valuation, remain to be paid in respect of any actuarial deficiency.

O.C. 159-2007, s. 5.

93. Sections 236 et 237 of the Act apply to the benefits and pensions of the members and beneficiaries affected by the withdrawal of an employer from a multi-employer pension plan.

O.C. 159-2007, s. 5.

94. Where, by reason of a decision concerning the certification of an employees’ association or a decision of a given group of employees provided for under the pension plan, certain active members of a plan cease to meet the eligibility requirements fixed by the plan, the provisions of the Act and the regulations thereunder concerning the withdrawal of an employer that is party to a multi-employer pension plan apply, with the necessary modifications. In such case, the following are considered to be affected by the withdrawal:

(1)  active members who cease to be employees eligible for membership in the plan by reason of the decision;

(2)  non-active members who would have ceased to be employees eligible for membership in the plan if they had been active members on the date of the decision;

(3)  beneficiaries whose benefits are derived from those of members who would have ceased to be eligible employees if they had been active members on the date of the decision.

However, where, by reason of the decision referred to in the first paragraph, the members referred to in this paragraph become eligible for another pension plan in the same category, the plan in which they cease to be active members must be the object of an amendment concerning the division of its assets and liabilities. If the person authorized under the plan to make such an amendment fails to do so within 30 days after the pension committee is informed of the decision, the committee must make it. The members and beneficiaries referred to in subparagraphs 1, 2 and 3 of the first paragraph must be included in the division.

O.C. 159-2007, s. 5.

95. Retraite Québec may not authorize:

(1)  the division of the assets and liabilities of a member-funded pension plan among several plans where one or more of those plans do not belong to that category;

(2)  the merger of the assets and liabilities of a member-funded pension plan with those of a plan that does not belong to that category.

Where the assets and liabilities of a pension plan are divided and the plan was partially funded at the date of the division and where one or the other of the plans whose assets and liabilities are merged was partially funded at the date of the merger, the unfunded actuarial liability affecting any plan arising from such operation is considered to be a continuation of the unfunded liability previously determined and must be amortized within the period that remained for the amortization of such unfunded liability.

O.C. 159-2007, s. 5.

REFERENCES

O.C. 1160-90, 1990 G.O. 2, 2333

O.C. 1893-93, 1993 G.O. 2, 7146

O.C. 657-94, 1994 G.O. 2, 1871

O.C. 1466-95, 1995 G.O. 2, 3160

O.C. 280-99, 1999 G.O. 2, 431

O.C. 1290-99, 1999 G.O. 2, 4398

O.C. 1151-2002, 2002 G.O. 2, 5369

O.C. 436-2004, 2004 G.O. 2, 1615

O.C. 798-2006, 2006 G.O. 2, 3019

O.C. 1098-2006, 2006 G.O. 2, 3937

O.C. 159-2007, 2007 G.O. 2, 1064

O.C. 541-2010, 2010 G.O. 2, 1880

O.C. 1013-2011, 2011 G.O. 2, 2952

O.C. 1052-2012, 2012 G.O. 2, 3209

O.C. 345-2015, 2015 G.O. 2, 582

S.Q. 2015, c. 20, s. 61