In early April 2020, Retraite Québec indicated that it was examining various scenarios to assist administrators of supplemental pension plans in the context of the COVID-19 pandemic, with the intention of implementing temporary easing measures to facilitate the administration of such plans during the crisis.
On April 16, 2020, Retraite Québec published a statement in which it announced two measures to facilitate the administration of supplemental pension plans in the current context:
The extension of deadlines applicable to certain regulatory and legal obligations
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An update to the degree of solvency that must be taken into account for certain payments under defined benefit pension plans.
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According to Retraite Québec’s statement, these measures may be subject to specific legislative provisions once parliamentary proceedings resume.
FIRST MEASURE: DEADLINE EXTENSION
Under the first easing measure, the deadlines for providing certain documents to Retraite Québec and to members and beneficiaries of supplemental pension plans have been extended by three months. This extension only applies to deadlines that had not expired by March 12, 2020, but which would have expired in 2020.
For further details about the applicable documents and deadlines, please see the following table:
|
Supplemental pension plan (SPP) |
Current deadline |
Extended deadline |
|---|---|---|
|
Annual statement for members and beneficiaries |
September 30, 2020 |
December 31, 2020 |
|
Triennial or annual actuarial valuation, actuarial valuation for an amendment to the plan or for the use of excess assets |
September 30, 2020 |
December 31, 2020 |
|
Actuarial valuation for a purchase of annuities |
Within 4 months of date of purchase |
Current deadline + 3 months |
|
Actuarial valuation required by Retraite Québec |
Within 60 days of the valuation date |
Current deadline + 3 months |
|
Notice regarding the plan’s financial situation |
September 30, 2020 |
December 31, 2020 |
|
Actuarial valuation for a negotiated contribution plan |
June 30, 2020 |
September 30, 2020 |
|
Recovery plan for negotiated contribution plans |
Within 18 months of the valuation date |
Current deadline + 3 months |
|
Application for registration of amendments provided for in the recovery plan |
Within 24 months of the valuation date |
Current deadline + 3 months |
|
Annual information return (AIR) and financial report |
June 30, 2020 |
September 30, 2020 |
|
Notice of annual meeting |
September 30, 2020 |
December 31, 2020 |
|
Termination report |
Within 90 days of receiving termination report |
Current deadline + 3 months |
|
Termination or employer withdrawal report (if the employer is insolvent) |
Within 120 days of date of termination or withdrawal |
Current deadline + 3 months |
|
Simplified pension plan (SPP) |
Current deadline |
Extended deadline |
|---|---|---|
|
AIR and financial report |
June 30, 2020 |
September 30, 2020 |
However, this measure does not extend the deadlines for sending a statement when an employee leaves a plan or for filing a transfer application.
SECOND MEASURE: UPDATE TO SOLVENCY CONSIDERATIONS
Under the terms of the second temporary easing measure, all transfers and refunds to be made between April 17, 2020 and December 31, 2020 must consider the degree of solvency that reflects the plans’ current financial situation.
Those payments must therefore consider the degree of solvency updated on the last working day of the month preceding the date on which the value of the member’s benefits was determined. However, if the date on which such value is determined is prior to April 1, 2020, the degree of solvency must be determined based on the plan’s estimated financial situation as at March 31, 2020.
The degree of solvency must be the one estimated by an actuary based on the plan’s estimated financial situation, by taking into account, among other things, the real rate of return of the pension fund, changes in interest rates on a solvency basis, and contributions that were made since the plan’s last complete actuarial valuation. These estimates must be provided to Retraite Québec only when requested by the latter.
ADDITIONAL INFORMATION
Actuarial Valuations as at December 31, 2019
In addition to the announced temporary easing measures, Retraite Québec reminds administrators of supplemental pension plans that, under the Supplemental Pension Plans Act (SPPA), the funding of supplemental pension plans must be based on actuarial valuations to be produced at least every three years. As a result, a plan administrator could, given the current context and the financial market crisis, elect to produce an actuarial valuation as at December 31, 2019, even if the maximum three-year period for producing an actuarial valuation has not expired. This measure is already allowed under the SPPA and does not require authorization from Retraite Québec.
Payment of Contributions into Pension Funds
Finally, Retraite Québec also reminds pension plan administrators that the deadlines for making monthly payments into a pension fund and for notifying Retraite Québec of any unpaid contributions (within 60 days after such contributions become due) have not been extended by the temporary easing measures announced on April 16, 2020.
For more information on the temporary easing measures regarding the administration of supplemental pension plans, please visit Retraite Québec’s website.
For further information, please contact:
Natalie Bussière 514-982-4080
Catherine Gagné 514-982-4085
or any other member of our Pension, Benefits & Executive Compensation group.
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