Supplemental Pension Plan
Several terms are used in talking about supplemental pension plans: pension plans, registered pension plans, company plans, etc.
A supplemental pension plan is a written contract by which an employer acting alone or an employer and its employees who are members of the plan are required to contribute to the plan. The contributions are intended to provide the plan's members with retirement income. The income from a pension plan is added to the income received from public plans.
Worth knowing about
The employer and member contributions are paid into a pension fund. The fund can be thought of as the plan's "bank account".
Transfer instruments
There are three kinds of transfer instruments in addition to supplemental pension plans:
Under the Supplemental Pension Plans Act
The supplemental pension plans in which Québec workers participate are subject to the Supplemental Pension Plans Act. Such plans comprise plans sponsored by employers in the private, municipal and university sectors, and some plans in the parapublic sector, which are under provincial jurisdiction.
Exceptions
Some supplemental pension plans are not subject to the Supplemental Pension Plans Act, including plans in the Québec public sector (such as the Government and Public Employees Retirement Plan [RREGOP]) and in the federal public sector, as well as private plans in sectors under federal jurisdiction (such as plans for banks). Such plans are subject to
a different law applicable to supplemental pension plans.
The Regulation respecting supplemental pension plans, which stems from the
Supplemental Pension Plans Act, governs
LIRAs and
LIFs whose amounts initially come from a plan, such as
RREGOP, that is subject to the Supplemental Pension Plans Act or another Québec law, or from the locked-in account of a voluntary retirement savings plan (VRSP). For details, consult
Applicable laws for
LIRAs and LIFs.
The Regulation also governs annuity contracts whose amounts come from a pension plan subject to the Supplemental Pension Plans Act.
Under the supervision of
Retraite Québec
Supplemental pension plans subject to the Supplemental Pension Plans Act along with LIRAs,
LIFs and pension annuity contracts governed by the Regulation are
under the supervision of Retraite Québec. In this capacity,
Retraite Québec ensures that the plans are administered and operated in accordance with the Supplemental Pension Plans Act.
Retraite Québec's main duties are as follows:
- register plans, standard contracts for
LIRAs and
LIFs and any amendments;
- examine the annual information returns;
- verify actuarial valuation reports and termination reports;
- request additional documents and information;
- inspect pension plans;
- inform clients (plan administrators, members and beneficiaries, employers, etc.);
- provide training to pension committee members.
Under the supervision of another agency
Where a pension plan has workers whose rights are subject to the Supplemental Pension Plans Act and workers whose rights are subject to another provincial or federal law, it may be under the supervision of
another agency having a similar mandate to that of
Retraite Québec. In such a case, the other agency must ensure, on behalf of
Retraite Québec, that the rights of Québec workers are in conformity with the Supplemental Pension Plans Act. That agency takes its mandate from an
agreement entered into between different government authorities that specifies how various pension plan legislation must be applied.
Seizable or unseizable supplemental pension plan
If there is no bankruptcy
With a few exceptions, benefits accrued under a pension plan subject to the Supplemental Pension Plans Act are
unseizable. They cannot be given as security. Amounts from such a plan are also
unseizable. The amounts can be, for example:
- those paid in the form of a benefit or refund;
- those transferred to an annuity contract, a locked-in retirement account (LIRA), a life income fund (LIF), a registered retirement savings plan (RRSP), or a registered retirement income fund (RRIF).
Exceptions
Benefits accrued under a plan subject to the Supplemental Pension Plans Act, or amounts from such a plan can be seized for:
- a support payment debt (maximum 50%);
- partition of family patrimony;
- payment of a compensatory allowance.
Voluntary contributions, as well as amounts from a not locked-in account under a simplified pension plan (SIPP), become seizable when they are no longer in the plan, for example, when they have been transferred to an RRSP.
When a plan is terminated, any surplus assets transferred to a member, a beneficiary or the employer are seizable.
Benefits accrued under a plan referred to in
section 2.1 of the Supplemental Pension Plans Act 
(plans for major shareholders that are not registered with Retraite Québec) become seizable when they are no longer in the plan.
In the case of bankruptcy
In the case of bankruptcy, all pension plans are
unseizable. The same is true for RRSPs, RRIFs, LIRAs and LIFs.
Exception
For RRSPs, RRIFs, LIRAs and LIFs that would have been seizable had there been no bankruptcy (for example, an RRSP in which amounts from the not locked-in SIPP account were transferred), the amounts paid into them in the 12 months preceding the bankruptcy are seizable.
References