Procedure for converting a defined contribution pension plan into an SIPP

The following procedure can be used either by an employer who acts as the administrator of a plan with less than 26 members or by a pension committee.

  1. Notify Retraite Québec of your intention to convert your existing defined contribution plan into an SIPP

    You must send the required Form I to Retraite Québec, as soon as the decision to convert the existing plan into a simplified pension plan (SIPP) is made, so as to obtain Retraite Québec's confirmation that the conversion process can begin.

    Conversion date of the plan

    • The conversion date cannot be prior to:
      • the date on which collection of member contributions ceased
      • more than 30 days before the date on which the notice of conversion is sent to the existing plan's active members (unless you obtain the written consent of all members who are active on the conversion date)
    • The conversion date cannot be more than 60 days after the date on which the notice of conversion is sent.
    • The date on which a company begins to participate in an SIPP cannot be later than the day following the conversion date.

    Example

    • To convert a plan as at 30 September, the notice of conversion must be sent between 1 August (i.e., 30 September less 60 days) and 30 October (i.e., 30 September plus 30 days)
    • If the notice is sent after 30 October, the written consent of the active members will be required.
    • The employer's participation in the SIPP will begin on 1 October.
  2. Send a notice of conversion

    You must send a notice of conversion to:

    • all members and beneficiaries of the existing pension plan
    • all concerned unions (if any)
    • the pension committee
    • the insurer, where appropriate.

    A copy of the notice must be sent to Retraite Québec without delay. Important


    A notice of conversion must be sent even where the plan is established by a collective agreement or has been negotiated with the union.


    Contents of the notice of conversion

    The notice must include:

    • the name of the plan and its registration number at Retraite Québec
    • the plan's conversion date
    • the members and beneficiaries affected by the conversion (without mentioning their names)
    • the fact that the existing plan is being terminated in order to be converted into an SIPP offer by the designated financial institution.

    In addition, for the active members of the existing plan who will be enrolled in the SIPP, the notice must include:

    • any provision of the SIPP whose effects will not be identical to the provisions of the existing plan with regard of the following matters:
      • the conditions for members to join and withdraw from the plan
      • the employer contribution and (if any) the member contribution as well as the method for calculating contributions.
  3. Send statements of benefits to the members and beneficiaries

    Within 60 days following the latest of the conversion date and the date of the sending of the notice of conversion, you must send a statement of benefits to each member and beneficiary of the existing plan. See details of the statement (Appendix I).

  4. Pay the members' and beneficiaries' benefits

    After taking into consideration the observations of the members and beneficiaries, you must pay their benefits within 60 days following the date on which the statements of benefits are sent.

    Active members who will be enrolled in the SIPP

    All defined contribution benefits will be transferred to the SIPP.

    Those benefits will be credited to the member's locked-in account, except for any additional voluntary contributions and not-locked in amounts resulting from a previous transfer, which will be credited to the member's not locked-in account.

    Insured benefits (if any) will be transferred to one of the retirement savings instruments referred to in section 236 of the Supplemental Pension Plans Act, in accordance with the member's instructions.

    Members and beneficiaries who will not be enrolled in the SIPP and who have not begun receiving a pension

    The value of their benefits will be transferred to one of the retirement savings instruments referred to in section 236 of the Supplemental Pension Plans Act, in accordance with the member's instructions.

    Members and beneficiaries who are already receiving a pension

    The insurer will continue to pay the pensions of those members and beneficiaries.

    Payment methods according the category of members and beneficiaries
  5. Submit an annual information return

    If the conversion date coincides with the ending date of the plan's fiscal year, you must file an annual information return (AIR) with Retraite Québec, including appendixes 1 and 2 and sections 1, 2 and 3 of appendix 3A.

    You must submit the return, accompanied with the required fees, no later than the sending date of Form II (which is an appendix to Newsletter number 17).

  6. Make a report to Retraite Québec on the payment of benefits

    Within 30 days following payment of the members' and beneficiaries' benefits, send a report on that payment to Retraite Québec by submitting Form II, duly completed.

To find out more...

Newsletter number 17, published by the Régie des rentes du Québec in June 2004.

Practical corner

The Gouvernement du Québec publishes its Web pages in French. Consistent with the Charter of the French Language and to inform stakeholders outside Québec, this page is also published in English.
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