Pension plan termination
In this section, plan administrators will find information on the termination process of a
defined-contribution or a defined-benefit pension plan.
The contents of this section do not apply to a pension plan (SIPP). To find out about the terms that apply to the plan, please consult the Terminating a simplified pension plan section.
The goal of plan termination is to liquidate the pension fund completely
To terminate a plan, the plan administrator (usually the pension committee) and the employer must perform several tasks within the prescribed time limits so that the termination process respects the Supplemental Pension Plans Act as well as the rights and obligations of all the interested parties, including members and beneficiaries.
Plans with fewer than 26 members and beneficiaries where the employer is the plan administrator
The employer has 2 roles: fulfilling the duties of an employer and those of a plan administrator. In the role of administrator, employers must act in the best interests of plan members and beneficiaries.
The employer is bankrupt
Where the plan administrator is a pension committee, it stays in place despite the employer's bankruptcy and must perform the tasks associated with terminating the plan.
Retraite Québec intervenes very little in the termination process, Retraite Québec does have significant powers to ensure that the rights of members, beneficiaries and other parties in the plan are respected. Find out about
its role in terminating a pension plan.
Steps of the termination process
The written notice of termination sent by the employer or Retraite Québec's decision to terminate the pension plan, as the case may be, is the starting point for plan termination.
The plan administrator's obligations
The plan administrator must respect the time limits provided for by the Act to prepare (or to have prepared, as the case may be) and send various documents, including the following :
The administrator must also: