Good News for Retirement Security — A new option will soon be available in Quebec

On November 7, the Quebec Minister of Finance presented his economic update on Quebec’s finances. The Minister, who is also responsible for Retraite Québec, had good news in this regard.

The Minister confirmed the Government of Quebec’s desire to offer a new pension plan option for Quebec employers and workers. In this respect, the government will propose a regulatory framework to introduce target benefit plans (TB plans).

In short, a TB plan is a type of pension plan that promises workers a lifetime pension whose level can vary according to the plan’s financial status and where contributions are fixed in advance. For workers, this type of plan provides greater financial security compared to a capital accumulation plan. For employers, it eliminates the financial risks traditionally associated with defined benefit plans.

In Quebec, the TB plans are currently only permitted for certain pulp and paper companies. The Minister confirmed that legislation will be introduced in the spring of 2020 to allow all employers of the province to set up such a plan. Given the current situation with defined benefit plans, the Minister points out that TB plans will represent considerable progress that reflects demands made by the employers and unions.

As usual, we will closely follow the introduction of this bill and keep you informed of developments.

Want more information? Contact your Normandin Beaudry advisor or write to us.