Terminating a simplified pension plan

This section deals with the conditions that apply to terminating a simplified pension plan (SIPP).

Important points to consider

The right to terminate an SIPP

The power to terminate an SIPP belongs to the financial institution that administers the plan.

An employer may decide to stop participating in an SIPP, which is a case of withdrawal of an employer.

Termination procedure

Step 1 -Notice of termination

The financial institution that administers the plan and decides to terminate it must immediately inform:

  • the employers affected by the withdrawal
  • the union, if any
  • the members affected
  • Retraite Québec.

Step 2 - Statements and payment of benefits to members

The financial institution must send every member a statement of benefits accompanied by a note explaining that the benefits will be transferred within 60 days of sending the statement, based on the applicable method chosen by the member, or failing that, the financial institution.

The statements of benefits must be sent soon after the date on which the SIPP is terminated.

Terminating an SIPP does not eliminate the employer's obligation to pay required contributions.

The financial institution must initiate the procedures necessary for recovering any contributions owed, with interest.

If an employer is unable to pay the amounts owed (because of bankruptcy, for example), the financial institution will have to reduce the benefits of the members concerned.

Untraceable persons and Revenu Québec

If the financial institution is unable to send a statement of benefits to a member (for instance, documents sent have been returned or the person has moved leaving no forwarding address), the institution should contact Retraite Québec with a request to locate the person in question.

The request must be accompanied with the required fees and specify the following information about the member(s) concerned:

  • name
  • last known address
  • social insurance number
  • date of birth.

If Retraite Québec locates a member, it invites him or her to contact the financial institution that administers the SIPP.

Untraceable persons

All amounts owing to an untraceable person must be transferred to Revenu Québec This link will open in a new window..

Step 3 - Reporting to Retraite Québec regarding the payment of benefits to members

After paying benefits to members affected by the termination, within 90 days following the last payment, the financial institution must report to Retraite Québec regarding that payment. For that purpose, the institution must send Retraite Québec the following:

  • an attestation signed by an authorized person affirming that all the benefits paid were the amounts which could be claimed by those affected by the plan termination and that the payments were made in conformity with the Supplemental Pension Plans Act
  • the annual information return and the financial report for the period from 1 January of the year in which the termination notice was sent to members until the date of the end of payment of benefits.
  • payment of required fees for the SIPP termination
  • a list of names, enrolment dates (if any) and the withdrawal date for every employer that became party to the SIPP or who stopped being party to the SIPP for the period covered by the annual information return.
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