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September 2021

Amendments to the Regulation respecting supplemental pension plans

On September 22, the Quebec government published a draft regulation amending the Regulation respecting supplemental pension plans, which was made necessary following the adoption of Bill 68 in December 2020.

This draft regulation concerns mainly target benefit (TB) pension plans, but also contains measures affecting defined benefit (DB) plans and multi-employer negotiated contribution plans.


Bill 68 introduced the possibility for DB plans of the private, municipal and university sectors to establish the solvency ratio for the payment of benefits in intervals shorter than a plan’s fiscal year.

The draft regulation outlines the requirements for these plans, namely:

  • Modifying the plan text to indicate the interval according to which the solvency ratio must be calculated. This interval cannot be less than one month.
  • Specifying if the calculation must be carried out systematically or only where required under the Supplemental Pension Plans Act.
  • Indicating in the actuarial valuation report the method used to determine the solvency ratio according to the selected interval.

The draft regulation provides specific requirements regarding the contents of actuarial valuation reports of TB plans, including the elements needed to examine the sufficiency of contributions, separately for past service and future service.

Given the importance of communication for a TB plan, the draft regulation sets out additional information to be included when communicating with members and beneficiaries (plan summaries, annual statements, statements of benefits and annual meetings). These requirements mainly aim to provide members with the following information:

  • A description of what a target benefit plan actually is;
  • A description of risks incurred by members and the means taken to manage these risks; and
  • The possibility that TB plan benefits may be reduced in the event that contributions are insufficient.

The draft regulation also contains measures related to the payment of benefits in the event of an employer withdrawal or transfer of benefits, as well as the terms and conditions for a plan conversion (conversion of a defined contribution or multi-employer negotiated contribution pension plan into a TB plan, or a TB plan into a DB plan).


The draft regulation introduces a series of modifications to the special provisions related to the withdrawal of an employer or the termination of a multi-employer negotiated contribution plan in the event of insufficient assets.

Anyone wishing to comment on the draft regulation has 45 days to do so. Further elements will be addressed in future draft regulations, including elements specific to TBPP, namely assumptions for calculating the value of the benefits of members whose membership ceased and the terms and conditions for annuity purchases during the plan’s existence. An upcoming draft regulation is also expected to outline the terms and conditions for variable payment life annuities.

If you have any questions, do not hesitate to contact Normandin Beaudry’s pension and savings experts or email us.


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