December 2017

Mandatory Funding Policy: The Countdown Is On

About a year from now, on January 4, 2019, all Quebec defined benefit pension plans will be required to have a funding policy in place. Yesterday morning, the Quebec government announced that a regulation will soon be in effect bringing certain provisions of Bill 29* into force, including the one making the funding policy mandatory.

In accordance with the specific criteria set out in the bill, the policy should include:

  • the principles related to pension plan funding that must guide the pension committee in the performance of its duties
  • the plan’s funding objectives
  • the main risks related to the plan’s funding and the employer’s and active members’ level of risk tolerance

This is an opportunity to ensure greater coherence in your pension plan funding decisions and to review your objectives-based strategies. To maximize profit, your funding policy should be perfectly aligned with your investment policy and your plan’s benefits.

For the past 25 years, Normandin Beaudry specialists have been promoting funding policies as a governance instrument for pension plans and have been helping clients in developing or fine-tuning this strategic tool. Whether you are looking to establish your policy or validate some of its elements, we will be pleased to put our expertise to good use to allow you to comply with the new legislative requirements.


* Act to amend the Supplemental Pension Plans Act mainly with respect to the funding of defined benefit pension plans (Bill 29)

Please feel free to contact us for additional information.