Adoption of Bill 68 – One step closer to innovative retirement solutions in Quebec
On December 11, the Government of Quebec adopted Bill 68, An Act mainly to allow the establishment of target benefit pension plans. As we explained in our October bulletin, this bill opens the door to other innovative retirement solutions for Quebecers, such as:
- Introduction of target benefit pension plans (TBPP) in all industries.
- Option of having variable payment life annuity funds as a decumulation solution for defined contribution plans and voluntary retirement savings plans.
- Ability to set the solvency ratio for the payment of member benefits more than once a year for DB plans and TBPP.
As for TBPP, the Act reflects changes to Bill 68 that had been requested in parliamentary committee, including:
- A TBPP may set the automatic indexation of a member’s post-retirement pension based on a fixed rate.
- The rules for setting and paying the value of the benefits in the event of membership termination were reviewed.
- Restoration conditions were modified to allow for the faster restoration of benefits.
- The principle of equity that applies to the appropriation of surplus assets was amended to allow for greater flexibility.
- Employees will have to consent to their obligations in order for a TBPP to be put in place.
If you have any questions, do not hesitate to contact Normandin Beaudry’s pension and savings experts.