Amending a simplified pension plan

Below are the conditions that apply to amending a simplified pension plan (SIPP).

Important points to consider

• The financial institution can amend, divide or merge the plan. The institution also has the power to terminate or carry out an employer withdrawal.
• The financial institution that decides to amend the plan must give written notice to the employers concerned and the members affected.  
   

  Notifying members is not necessary when a new employer joins the plan.

• The employer can also, subject to any power-sharing agreements (as is the case if there is a union), have the plan amended or withdraw from the plan by instructing the financial institution to take the necessary measures to do so. 

• The financial institution that receives a notice of amendment from the employer must give written notice to the members affected.

Restrictions regarding amendments that reduce benefits

Amendments that limit eligibility to a plan, reduce employer contributions or decrease amounts paid into a member's account cannot take effect earlier than 30 days after:

• the effective date of the collective agreement, the arbitration agreement or the order or decree under which the amendment was made
• the date on which a notice was sent to members.
  The restrictions imposed on the effective date of amendments do not apply if the members affected give their consent, or if the amendment is made to allow the plan to remain a registered pension plan within the meaning of the Income Tax Act.