Your defined-contribution pension plan is terminated
The termination of a pension plan involves the application of certain rules by the employer and the plan administrator. Retraite Québec monitors the application of those rules and ensures that the payment of your benefits accured under the plan, that is, the sums credited to your account, and the liquidation of the pension fund are properly carried out.
The termination process for a pension plan takes at least 4 months. The
following aspects of the termination process concern the plan's members and beneficiaries in particular.
Notice of termination
An employer that terminates a plan must send a written notice of termination to all the affected members and beneficiaries. If you are an active member and the notice is sent to you more than 30 days after the termination date, the employer must obtain your consent to terminate the plan on that date. If not, the employer must change the termination date.
In some specific circumstances,
Retraite Québec can decide to terminate a plan. The plan administrator must then inform you of the termination by sending you a copy of the termination decision rendered by
To find out more about a notice of termination issued by the employer or a termination decision rendered by
Retraite Québec, contact your plan administrator.
Statement of benefits
The plan administrator must send a statement of benefits to all members and beneficiaries affected by the plan's termination. The statement informs you of:
- the sums credited to your account
- the payment methods (transfer options) for the sums credited to your account (for example: transfer to a locked-in retirement account (LIRA) or a life income fund (LIF)
- the deadline you have to inform the administrator of the payment option that you have chosen for your benefits and to provide the administrator with the information needed based on that choice
- If not informed of your choice, the administrator may be required to remit to Revenu Québec the amounts owed to you that have not been claimed.
- the deadline you have to ask for corrections or explanations with respect to your statement of benefits
- the plan's financial situation
- your right to consult, without charge, the plan's termination report
- The report can be consulted at the plan administrator's office or at an establishment of the employer, whichever is nearest your place of residence.
The termination report provides details on the plan's financial situation.
You do not have access to the personal information in the termination report that concerns the other members and beneficiaries affected by the plan's termination.
- Make sure that the information provided on your statement of benefits is accurate. If you find an error or omission or if you need more information, contact your plan administrator.
- For additional information about the termination report, contact your plan administrator.
- If the steps you have taken with your plan administrator fail, contact
If the plan administrator was unable to contact all the persons affected by the termination and to provide them with a statement of benefits, the administrator must have a notice published in a daily newspaper to invite them to come forward and claim their benefits under the plan.
If you did not receive your statement of benefits and you believe that you are entitled to benefits under the plan, contact the plan administrator to make your claim.
Payment of the sums credited to your account
The sums credited to your account will be paid in accordance with what is provided for in your statement of benefits and according to the instructions that you have given to the plan administrator. However, the administrator must make payments on the basis of the sums available in the pension fund. The payment of the sums credited to your account takes into account the pension fund's rate of return on investments (whether negative or positive) between the termination date and the date on which benefits are paid. It is therefore possible that adjustments be made to the sums credited to your account compared to those initially determined on your statement of benefits.
In the event of bankruptcy...
If an employer owes money to the plan, the administrator must take the necessary measures to recover the sums owing. The sums that will not have been recovered, where applicable, will not be paid to the accounts of members and beneficiaries.
If any plan expenses were to be paid by the employer and the employer is bankrupt, those expenses may be deducted from your account and the accounts of the other members and beneficiaries.
Retraite Québec is following the the situation closely to ensure that any decrease in the members' and beneficiaries' benefits is done correctly.
If the plan has surplus assets upon termination, the
allocation rules specific to the plan will apply.
If you are entitled to a portion of surplus assets...
The plan administrator must offer you the choice between a cash payment or a tax-sheltered transfer to an authorized savings instrument, to the extent allowed by the tax rules.
For more information...
See the administrator's section on