Membership requirements for a simplified pension plan

A pension plan may cover all of a company's workers or only some categories of workers.

Who can be a member?

A worker is eligible for plan membership if he or she is in a category of employees covered by the employer's plan.

A worker can join the plan if, during the preceding year:

  • the employer paid the employee an annual income corresponding to at least 35% of the maximum pensionable earnings (MPE) under the Québec Pension Plan for the reference year

    or
  • the employee worked for at least 700 hours for the employer

However, a plan can allow an eligible employee to join the plan at an earlier date.

A helpful example...

An employer offers a plan to his or her unionized employees. In 2019, a person is hired and becomes a member of the union. That person is therefore eligible for membership in the plan. If, in 2019, the employee receives earnings of at least $20 090 (35% of the MPE for 2019, that is, 35% of $57 400) from the employer, or works at least 700 hours for the employer, the employee will be able to become a member of the plan as of 1 January 2020.

Membership in the plan: compulsory or optional?

It all depends on the characteristics of the plan:

  • If membership in the plan is compulsory and an employee is eligible, he or she must become a member as of 1 January of the year following the one in which the employee met one of the conditions indicated above.
  • If membership in the plan is optional and an employee is eligible, he or she can apply for membership at any time during the year following the one in which the employee met one of the conditions indicated above.

Information to be sent to eligible employees

Within 90 days of the date on which the employee becomes eligible for membership in the plan, the financial institution must send him or her a plan summary, which contains a brief description of the employee's rights and obligations, as well as a list of the main advantages of membership in the plan.

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