Bill 102 (Bill amending the Supplemental Pension Plans Act)LinkedIn
There, in black and white
NB Bulletin Vol. 4 N. 12, October 2001
The draft Supplemental Pension Plans Regulations regarding the enforcement of Bill 102 (Bill amending the Supplemental Pension Plans Act and other legislations) was published in the Gazette officielle on Wednesday¸ September 26¸ 2001.
KEY ELEMENTS OF THE DRAFT REGULATIONS
The key elements of the draft regulations are as follows:
- Annual Statement: In addition to the supplementary financial information already required by Bill 102 (employee and employer contributions¸ contribution holidays¸ etc.)¸ the annual statement of an active member must include the commuted value of the accrued benefits (for members who would have been entitled to a transfer as of the date of the statement) as well as a warning with respect to the potential variability of this commuted value. Furthermore¸ the statement must contain¸ where applicable¸ a description of the benefits waived by the member´s spouse. Finally¸ some information that was previously disclosed in the annual statement will be transferred to the information booklet.
- The annual statement of a non-active member¸ other than a retiree¸ must include the additional benefit to which the member is entitled and the commuted value of the deferred pension. Finally¸ the annual statement of a beneficiary of a survivor pension¸ newly required by Bill 102¸ shall be the same as the annual statement of a non-active member¸ with the necessary adjustments.
- Fees: A new fee schedule is proposed for all fees required by the Régie. The following table provides a comparison between the old and the revised fee schedule payable when filing the Annual Information Return:
| ||Old Schedule||Revised Schedule|
| || || |
| || || |
| Fixed fees|| None|| Plans not subject to a periodical actuarial valuation: $250|
| || || Plans that must submit a periodical actuarial valuation: $500|
| Fees per member|| $10 per active member|| $7 per active or non-active member and beneficiary¸; with an annual increase to reflect the changes in YMPE|
| Minimum fees||$250|| n/a|
| Maximum fees|| $50¸000||$100¸000 |
- Marriage breakdown benefit: The terms and conditions applicable to the statement of benefits at the stage of mediation are specified: the application to obtain a statement must contain an attestation of the date the relationship ended and a confirmation that a mediator has been mandated; the benefit calculations are performed considering the value as of that date.
- When determining the value of the marriage breakdown benefit¸ a 50% weight for the value of the deferred pension with early retirement subsidies¸ if any¸ must now be taken into account (previously¸ this element often used to be a litigious issue). Moreover¸ the calculations will now be performed on a daily basis rather than on a monthly basis.
- Finally¸ the deadline to produce the statement is now 60 days rather than 90 days¸ and the deadline to complete the split becomes 60 days instead of 120 days (from the date the spouse gives instructions as to the transfer).
- Additional termination benefit: For members who¸ at the time of termination of membership¸ are entitled to an additional benefit and elect not to transfer to a locked-in retirement account¸ the conditions applicable to the additional benefit are specified. In these circumstances¸ the plan may stipulate that additional benefit will be converted into a life annuity determined on the date of termination of membership. As an alternative¸ the plan may provide that¸ with the consent of the member¸ the additional benefit be converted into an ancillary benefit determined on the date of termination of membership (indexation¸ improved death benefit¸ etc.). The additional benefit and its value must be disclosed on the termination of membership statement.
- Seizure for alimony: Bill 102 now provides for a refund of any amount seized for alimony. In such cases¸ calculations are performed as of the date of the seizure as the marriage breakdown benefits¸ with an adjustment to take into account the impact of income taxes (in other words¸ the amount calculated after deducting the applicable income taxes must be equal to the amount seized).
There will be a period of 45 days¸ from September 26¸ 2001 to November 10¸ 2001¸ to allow anyone who wishes to examine the draft regulations and to provide comments to the Régie. Afterwards¸ the Régie will consider the comments received and will finalize the regulations¸ which will again be published in the Gazette officielle. The regulations will come into force 15 days after this second publication.
All pension plan committees must now analyze the implications that these draft regulations will have on their own pension plans and proceed with the necessary changes to their plan text and to their current administrative procedures. The original deadline provided by Bill 102 to comply with the new provisions was December 31¸ 2001. Since the regulations were not published in a timely manner¸ the Régie extended the deadline to June 30¸ 2002 for compliance purposes with respect to defined benefit pension plans. However¸ other types of pension plans will have to comply with the new provisions by December 31¸ 2001.
Normandin Beaudry will remain at the centre of discussions on the draft regulations and will quickly advise you of any major developments related to this matter.
Please feel free to contact us for additional information.
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