Bill 102 (Bill amending the Supplemental Pension Plans Act)LinkedIn
There, in black and white
NB Bulletin Vol. 5 N. 2, March 2002
The Supplemental Pension Plan Regulations pursuant to Bill 102 (Bill amending the Supplemental Pension Plans Act and other legislations)¸ were published in the Wednesday March 6¸ 2002 issue of the Gazette Officielle du Québec. The draft regulations were approved and will come into effect on March 21¸ 2002.
Pursuant to the comments obtained by the Régie des rentes du Québec following the publication of the draft regulations in September 2001¸ several amendments were made to the regulations that were filed by the government. This bulletin reviews the highlights of the October 2001 bulletin (vol. 4¸ no. 12) and presents the main amendments to the final draft regulations.
The key elements of the draft regulations are as follows:
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.
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:
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).
Pension plan committees may now complete their analysis of the impacts of Bill 102 and its regulations on their pension plans and proceed with the necessary amendments to their plan text and to their current administrative procedures. Decisions may be reached by considering the flexibility provided by the regulations of Bill 102 regarding the introduction of the amendments to the annual statements¸ such as the commuted value of the accrued benefits which does not have to be introduced on the statement prior to December 31¸ 2004. Pension plan committees of defined benefit plans still have until June 30¸ 2002 to comply with Bill 102 in respect to their plan text.
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