Retraite Québec introduces temporary relief measures for the administration of supplemental pension plans
In the context of the COVID-19 outbreak, Retraite Québec announced on April 16, 2020 that it is implementing three temporary relief measures to assist administrators and members of supplemental pension plans.
The temporary measures provide for the following:
- A three-month extension, without penalty, of the deadlines for certain regulatory and legal obligations.
- Update to the degree of solvency that must be taken into account for payments (transfers and refunds) under defined benefit plans.
- More flexible rules for the withdrawal of locked-in amounts in a life income fund.
Extension of deadlines for providing certain documents
Deadlines which had not expired as of March 12, 2020, and which fall in 2020, have been extended by three months. Using a plan with a fiscal year end of December 31, 2019 as an example, the following key deadlines have been extended:
Additional deadline extensions are listed on the Retraite Québec website. The deadline for providing a termination statement after a member ceases plan membership has not been extended.
Defined benefit transfers based on plan solvency
Upon termination of a member’s participation in a defined benefit pension plan, all payments (including transfers and refunds) made between April 17, 2020 and December 31, 2020 must take into account an estimated degree of solvency that reflects the plan’s current financial position.
This means that the payments must take into account 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 the value is determined is prior to April 1, 2020, the degree of solvency must be determined based on the plan’s estimated financial position as at March 31, 2020.
The plan actuary is required to estimate the degree of plan solvency, but is not required to provide it to Retraite Québec.
Withdrawal of locked-in amounts in a life income fund (LIF)
It will now be possible to withdraw from a LIF a single amount corresponding to 40% of the maximum pensionable earnings (i.e., $23,480 in 2020), without regard to income from other sources. This temporary measure applies only to the year 2020 and only to persons who were under age 70 as at December 31, 2019. Persons holding a LIF who were at least age 65 but under age 70 on December 31, 2019, would normally not be entitled to this form of temporary income.