Payment of benefits to plan members and beneficiaries
Prescribed time limit
The plan administrator must pay benefits to members and beneficiaries between 30 and 60 days after receipt of the termination report by Retraite Québec. In other words, the administrator must wait 30 days before paying benefits.
Worth knowing about...
The acknowledgement of receipt for the termination report that Retraite Québec sends indicates the date on which the administrator can pay benefits.
The 30-day waiting period imposed on the administrator for paying benefits allows Retraite Québec to read the termination report and demand corrections, if necessary.
Retraite Québec can order that payment of benefits be postponed
Retraite Québec has the power, in some cases, to order the administrator to postpone payment of benefits, for example, to get certain details about the termination report.
When the situation arises, Retraite Québec informs the administrator of the new waiting period for payment of benefits.
Cash advances to plan members and beneficiaries
The plan administrator can:
- continue to pay pensions that were already in payment on the termination date or early benefits already scheduled on the termination date
- start payment of pensions that become payable after the termination date.
However, if the plan is not solvent, the administrator must get Retraite Québec's consent prior to making payments.
Other types of advances
The Supplemental Pension Plans Act does not make any provision either allowing or forbidding cash advances.
If the administrator decides to make cash advances, it must assume the risk. Thus, the plan administrator is responsible for recovering overpayments to members and beneficiaries, if, for example, it turns out that:
- the plan's pension fund has poor returns
- amounts that were supposed to be paid by the employer will not be collected because of bankruptcy
- the termination report contains an error or an omission.
Untraceable persons and Revenu Québec
If the administrator is still unable to trace missing plan members or beneficiaries even after taking the proper step, including contacting Retraite Québec, the administrator must remit the amounts owing to those persons to Revenu Québec .
Note - The plan administrator may only remit the amounts owing 3 years after expiry of the 90-day period. However, it can proceed before that 3-year period has passed if all that is left to do is pay the benefits of such untraceable members and beneficiaries.
The 90-day period starts on the date the plan administrator receives the notice of termination from the employer or Retraite Québec's decision to terminate the plan.
If there are surplus assets
If the termination report shows surplus assets, they must stay in the pension fund until a supplement to the termination report has been sent to Retraite Québec. Once again, there is a prescribed time limit for allocation of surplus assets.
Keep Retraite Québec informed as to how the situation progresses!
Although Retraite Québec no longer has to formally revoke a pension plan's registration after its termination, we appreciate being informed of your progress, especially with respect to pension fund liquidation until a final settlement.
Step after payment of benefits
Allocation of surplus assets (if any)
Terminating a simplified pension plan (SIPP)
The contents of this page are not pertinent to SIPPs. Please consult the page that deals with the steps to terminate an SIPP.