Consent of affected members to an amendment reducing benefits retroactively under a simplified pension plan (SIPP)

Such an amendment to an SIPP can have retroactive effect if the affected members have given their consent and the amendment has been authorized by us. Authorization is not required under standard provisions.

Who must give consent
Conditions for authorization
Documents required

Who must give consent

Each affected member must give his or her individual and explicit consent. Consent is required even if the amendment reducing benefits was negotiated under a collective agreement. In addition, a member who has not expressed his or her views cannot be considered to have given consent.

If some affected members do not give their consent

The amendment reducing benefits can apply retroactively only to those who have given their consent.

Conditions for authorization

It is not enough to simply obtain the required consent for the amendment to have retroactive effect. We must also give our authorization. This requirement is much more than a formality; without authorization, any steps taken will be considered null and void. An amendment cannot be applied until it has been authorized by us.

We will authorize the amendment if we have confirmation that the affected members received adequate and sufficient information to give informed consent. For this to happen, the document sent to the members for the purpose of obtaining their consent must:

  • explain the situation and include the reasons why the amendment is being made
  • use language that can be easily understood
  • indicate the date on which the amendment is expected to take effect
  • list both the benefits that will be granted after the amendment takes effect, and those currently in effect, in such a manner that the members can understand what is being reduced
  • provide sufficient information for the members understand how the amendment will affect them individually.

Standard provisions

Where the affected members have given consent, our authorization is not required if the amendment reducing benefits falls within the limits provided for under the standard provisions and variations of the provisions.

Documents required

We can request the following from the financial institution:

  • the written consent of the affected members
  • proof of the date on which the notice was sent to the members or the effective date of the collective agreement, as the case may be.

The financial institution must retain those documents.

We can also request that the financial institution provide the affected members' contact information in order to carry out verifications.

Practical corner

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