Quebec Announces Temporary Relief Measures for Supplemental Pension Plans During COVID-19

In early April 2020, Retraite Québec indicated that it was examining various scenarios to assist administrators of supplemental pension plans in the context of the COVID-19 pandemic, with the intention of implementing temporary easing measures to facilitate the administration of such plans during the crisis.

On April 16, 2020, Retraite Québec published a statement in which it announced two measures to facilitate the administration of supplemental pension plans in the current context:

The extension of deadlines applicable to certain regulatory and legal obligations

1. An update to the degree of solvency that must be taken into account for certain payments under defined benefit pension plans.

2. According to Retraite Québec’s statement, these measures may be subject to specific legislative provisions once parliamentary proceedings resume.

FIRST MEASURE: DEADLINE EXTENSION

Under the first easing measure, the deadlines for providing certain documents to Retraite Québec and to members and beneficiaries of supplemental pension plans have been extended by three months. This extension only applies to deadlines that had not expired by March 12, 2020, but which would have expired in 2020.

For further details about the applicable documents and deadlines, please see the following table:

However, this measure does not extend the deadlines for sending a statement when an employee leaves a plan or for filing a transfer application.

SECOND MEASURE: UPDATE TO SOLVENCY CONSIDERATIONS

Under the terms of the second temporary easing measure, all transfers and refunds to be made between April 17, 2020 and December 31, 2020 must consider the degree of solvency that reflects the plans’ current financial situation.

Those payments must therefore consider the degree of solvency updated on the last working day of the month preceding the date on which the value of the member’s benefits was determined. However, if the date on which such value is determined is prior to April 1, 2020, the degree of solvency must be determined based on the plan’s estimated financial situation as at March 31, 2020.

The degree of solvency must be the one estimated by an actuary based on the plan’s estimated financial situation, by taking into account, among other things, the real rate of return of the pension fund, changes in interest rates on a solvency basis, and contributions that were made since the plan’s last complete actuarial valuation. These estimates must be provided to Retraite Québec only when requested by the latter.

ADDITIONAL INFORMATION

Actuarial Valuations as at December 31, 2019

In addition to the announced temporary easing measures, Retraite Québec reminds administrators of supplemental pension plans that, under the Supplemental Pension Plans Act (SPPA), the funding of supplemental pension plans must be based on actuarial valuations to be produced at least every three years. As a result, a plan administrator could, given the current context and the financial market crisis, elect to produce an actuarial valuation as at December 31, 2019, even if the maximum three-year period for producing an actuarial valuation has not expired. This measure is already allowed under the SPPA and does not require authorization from Retraite Québec.

Payment of Contributions into Pension Funds

Finally, Retraite Québec also reminds pension plan administrators that the deadlines for making monthly payments into a pension fund and for notifying Retraite Québec of any unpaid contributions (within 60 days after such contributions become due) have not been extended by the temporary easing measures announced on April 16, 2020.

For more information on the temporary easing measures regarding the administration of supplemental pension plans, please visit Retraite Québec’s website.

For further information, please contact:

Natalie Bussière                       514-982-4080
Catherine Gagné                      514-982-4085

or any other member of our Pension, Benefits & Executive Compensation group.

Please visit our COVID-19 Resource Centre to learn more about how COVID-19 may impact your business.