The employer must record its proposal for the allocation of surplus assets in a draft agreement, the contents of which are prescribed in section 230.2 of the Supplemental Pension Plans Act and section 67.1 of the Regulation respecting supplemental pension plans . The employer then submits the draft agreement to the plan administrator and Retraite Québec (still within the same 150-day time period).
Within 15 days of receiving the draft agreement
The administrator must send the following to members and beneficiaries affected:
- a copy of the draft agreement
- a copy of the plan provisions in effect regarding the allocation of surplus assets when the plan is terminated.
- information identifying all the associations that represent the plan's active, non-unionized members and the plan's non-active members and beneficiaries (if the administrator has been informed that such associations exist).
Since 15 November 1988, it has been prohibited to amend plan provisions regarding the allocation of surplus assets when the plan is terminated.
If such amendments have nevertheless been made, they are null and void even if they have been registered with Retraite Québec.
Therefore, only amendments registered with Retraite Québec before 15 November 1988 can be considered. For a new plan registered after that date, only the initial provisions are to be considered
- a notice informing them that, among other things, they have 60 days to contest the draft agreement
Still within the same 15-day time period
The administrator must publish a notice inviting all persons who have not received a copy of the draft agreement and who believe that they are entitled to a share of the plan's surplus assets, to present a claim for benefits.
For more details about the notice, please see section 230.4 of the Supplemental Pension Plans Act .
Exemption from publishing a notice
The administrator can be exempt from publishing a notice if it was able to contact all members and beneficiaries for the purposes of allocation of surplus assets and give them a copy of the draft agreement with the pertinent information.
- Exemption is automatic if that condition is respected.
- The administrator does not need to request Retraite Québec's authorization. However, the administrator must be able to prove that the terms mentioned above were respected if Retraite Québec requires it.
The administrator must be able to show that all the persons affected for the purposes of allocation of surplus assets received a copy of the draft agreement and any other pertinent information. The fact that the documents were sent is not proof of receipt.
In many cases, former members are considered to be members and beneficiaries for the purposes of allocation of surplus assets. The administrator must be aware of this fact and be able to contact them to give them the pertinent documents
Rejection of a draft agreement
Although the draft agreement can make provisions for any method of allocating surplus assets, the method chosen will determine the amount of opposition required for the agreement to be rejected, either:
- 30% or more of members and beneficiaries express opposition
- a single member or beneficiary express opposition.
If the draft agreement is rejected, arbitration can be used to determine the allocation of surplus assets.
For more details, please see section 230.2 of the Supplemental Pension Plans Act and section 67.2 of the Regulation respecting supplemental pension plans .
The draft agreement is accepted
Surplus assets will be distributed in conformity with the agreement.