Quebec’s New “Voluntary Retirement Savings Plans”
On June 12, 2012, a Bill contemplating the implementation of a regime of low-cost retirement savings plans was introduced in the National Assembly. Bill 80 is intended to enact An Act Respecting Voluntary Retirement Savings Plans, which establishes a “voluntary retirement savings plan” that, to the extent tax rules allow it, is accessible to all individuals, including self-employed workers and workers whose employer has not subscribed to such a plan. This Bill introduces a regime similar in principle to that of the federal government’s Pooled Registered Pension Plans, introduced in 2011.
Once set up, these retirement savings plans will allow both employees and employers to contribute. Employers with five or more employees must register their employees in a plan, provided each employee has one year or more of uninterrupted service (as defined by the Act Respecting Labour Standards) and provided no RRSP or registered pension plan for which payroll deductions can be made already exists.
The proposed legislation will come into force on January 1, 2013; however, employers that currently have five or more employees will not have to register them in a plan until December 31, 2014.
Employees are given a good deal of latitude: they can determine their own rate of contribution, they can select differing investment and contribution options (under certain conditions) and they can decline to participate or terminate membership in a plan.
These new plans will be registered with the Régie des rentes and will be administered by insurers, trust companies or investment fund managers (who will need to hold a special licence issued by the Autorité des marchés financiers).
Our Pension Law Group
The area of pension law is replete with challenges, whether in regards to questions of solvency, financing or the risks involved, to name just a few. Considering the aging population and the uncertainty of the current economic climate, especially for companies, pension law will continue to be a major preoccupation for those in all industries.
The members of our pension law group possess an expertise founded on the obligations and responsibilities of directors, officers and members of pension committees in relation to the Supplemental Pension Plans Act.