Setting up a supplemental pension plan
Who decides to set up a plan?
Usually, a company's union or another employee group proposes the set up of a supplemental pension plan. The employer usually makes the final decision. In certain cases, a union, another association or an agency can make the decision.
The Supplemental Pension Plans Act does not indicate who can set up a supplemental pension plan. The body who establishes the plan must ensure that it is authorized to do so by the laws governing it. For example, that is the case for unions covered by the Professional Syndicates Act.
Regardless of who sets up the plan, the employer must consent to the obligations incumbent upon it under the plan. Other conditions may also apply.
Plan established by collective agreement
In certain cases, a pension plan can be established by collective agreement. That is the case if the plan text is included in the collective agreement or annexed to it, or if the collective agreement provides for the plan's benefits to be maintained for the duration of the agreement.
Having a union in a company does not mean that the plan is established by collective agreement.
Usually, if the plan is established by collective agreement, the employer and the union must agree in order to amend the plan.
The first steps
Before setting up a pension plan, the following elements must be defined:
- the group of employees who will be covered
- the conditions for joining the plan
- the amount of the employer's contribution
- the amount of the members' contributions, if any.
Choosing the right plan
To choose the right type of plan, the following must considered:
- the size of the company
- the company's financial means
- the employees' needs.
The details, obligations and costs of each type of plan must also be known.
Plans made to measure
To set up a plan, contact:
A supplemental pension plan must be registered with Retraite Québec if it is subject to the Supplemental Pension Plans Act. We suggest using the
appropriate application for registration of a pension plan form.
The plans subject to the Supplemental Pension Plans Act are plans whose employers carry on activities under provincial jurisdiction in the private, municipal and university sectors, as well as certain plans in the parapublic sector.
A supplemental pension plan must also be registered with the Canada Revenue Agency to be subject to the Income Tax Act
(section 147.1 – Registered Pension Plans ).
Plan for persons connected to the employer
A plan for which members are persons connected to the employer does not need to be registered with Retraite Québec if it meets the conditions set out under
section 2.1 of the Supplemental Pension Plans Act .