Total benefits

Important Notice

Please consult Newsletter number 32, Amendments to the Regulation respecting supplemental pension plans effective 4 January 2018, as well as division V – Transfer of benefits between spouses This link will open in a new window. of the Regulation respecting supplemental pension plans, to find out the rules for partition applicable to spouses in a civil union, the changes to the payment methods applicable to the former spouse, and the calculation of member benefits after partition.

Capital benefits and pension benefits

Capital benefits are benefits that accumulate in the form of capital

Generally, this means benefits in a defined contribution plan, including simplified pension plans.

Pension benefits are benefits that accumulate in the form of a pension

Generally, this means benefits in a defined benefit plan.

Excess member contributions and an additional pension benefit are considered to be pension benefits, even if they were not converted into an additional pension.

Pensions in payment are always pension benefits, even if the benefits were accumulated in a defined contribution plan. 


 

Valuation of vested and non-vested benefits

The value of any vested benefits must be determined. If not, the value of the deferred pension must be determined (and not the early pension, even if the member is over age 55).

Within the meaning of the Supplemental Pension Plans Act This link will open in a new window., benefits are vested when all the conditions were met, including the triggering event.

  • To be entitled to a deferred pension, the member must have ceased to be an active member.
  • To be entitled to an early pension, the member must not only be the age required, but also must have ended his or her period of continuous employment.

Example
On the date of the valuation, the member is 59 years old and is still employed. The value of the deferred pension to which he would be entitled if his active participation ended and he continued to work must be determined, and not the value of the early pension to which he would be entitled if he stopped working.

The value of other benefits or refunds to which the member is entitled or would be entitled if the member's active participation ended must also be determined. The value of any excess member contributions, additional voluntary contributions, an additional pension benefit or optional ancillary contributions (flex plan) must also be determined.

If the date of the valuation is before 2001 and at that time the member did not meet the conditions of participation necessary to be entitled to a pension, then the amount of the refund is determined instead.

Example
The date of institution of the action is 10 October 2000. At that time, the member had accumulated only 1 year of participation. According to the provisions of the plan, if the member's active membership had ended at that date, he or she would have been entitled to a refund of his or her member contributions. The value of benefits is thus the amount of member contributions, with interest, as at 10 October 2000.

The value of benefits must be determined on the basis of the situation as at the valuation date

Service credited after the valuation date must not be taken into account, even if it took place before that date. In addition, an amendment to the plan made after the valuation date must not be taken into account, even if the amendment takes effect before that date.

In a defined contribution plan, the value of benefits will be equal to the balance of the account as at the valuation date. However, if the valuation date is before 2001, it can be equal to the amount of the refund. 


Approximation of the total value of benefits when the exact value is not known

The plan administrator must sometimes determine the value of benefits when the date of the end of the conjugal relationship is in the distant past. Therefore the administrator may not have the information necessary to make the valuation. The Regulation respecting supplemental pension plans This link will open in a new window. provides an approximation method to determine the value of benefits, which varies depending on the 2 following situations: 

  1. The spouses are in family mediation and are applying for a statement of benefits to determine the value of benefits as at the date of the end of the conjugal relationship. In this case, the calculation will be the following:

    Value* at the date of
    the application
    ×Total participation up to the end of the conjugal relationship
    Total participation up to the date of the application

    *In a defined contribution plan: balance of the account at that date.

  2. The administrator receives an application for partition. The judgment requires that a certain portion of the value of the member's benefits estimated as at the end of the conjugal relationship be transferred to the other spouse. In this case, the calculation will be the following:

    Value at the date of
    institution of the action*
    ×Total participation up to the end of the conjugal relationship
    Total participation up to the date of the institution of the action

    * In a defined contribution plan: balance of the account at that date.

    The administrator must make an approximation only when it is impossible to obtain the necessary information after having taken all reasonable steps to do so.

For more information...

Top of page