Proposed amendments to the SPP Act

On November 2, Minister of Finance Carlos Leitao presented Bill 149 – An Act to enhance the Québec Pension Plan and to amend various retirement-related legislative provisions.

The bill deals with two distinct matters:

• Enhancing the public plan
• Amending certain provisions of the Supplemental Pension Plans Act (SPP Act)

In the interest of sharing important news about Quebec pension plans with you, we will cover the changes resulting from the enhancement of the public plan during a breakfast seminar on Wednesday, November 15.

Here is an overview of the proposed amendments to the SPP Act:

• Notice of annual meeting: Extension of the current period for sending the notice calling the annual meeting from six months to nine. New deadline: September 30 for plans with fiscal year ending December 31.
• Notice relating to the financial position of the plan: Extension of the current period for producing the annual notice of the financial position of the plan from four months to nine. New deadline: September 30 for plans with fiscal year ending December 31.
• Payment of benefits: Application of the degree of solvency on the date of the valuation of the benefits, instead of the date of payment. The degree of solvency remains the one established in the last actuarial valuation report, or, if it is more recent, in the last annual notice of the financial position transmitted to Retraite Quebec prior to the date of the valuation of the benefits.
• Letters of credit: Recording of sums paid by the employer to reduce letters of credit as an employer banker’s clause.
• Appropriation of surplus assets: For private-sector plans, flexibility as for the allocation of surplus assets during the life of a pension plan according to rules different from those provided by default under the SPP Act. In certain circumstances, the provisions of the plan as at December 31, 2015, may continue to apply. The scope of these changes is variable, and implications may be significant depending on the context.

Normandin Beaudry consultants are currently analyzing the scope of the bill and would be pleased to discuss potential issues with you.

Please feel free to contact us for additional information.