Accounting frameworks

The plan administrator must have a financial report or financial statements prepared by a competent person who knows the accounting standards applicable to pension plans.

However, the plan administrator must choose between two accounting frameworks:

• the accounting framework with no pension obligations (special purpose) for a financial report;
• the accounting framework with pension obligations (general purpose) for financial statements.

The plan administrator approves the choice of the accounting framework to be used to prepare the financial report or the financial statements. The report or financial statements are then audited, except where the pension plan is exempted from that requirement.

Framework with no pension obligations (special purpose)

The plan administrator that chooses a special purpose framework must have a financial report prepared in accordance with the choice of the framework.

The financial report must be entitled Financial Report for "Name of the Pension Plan". It must comply with the Accounting Standards for Pension Plans of Section 4600, Pension Plans, in Part IV of the CPA Canada Handbook– Accounting, with the exception of elements pertaining to pension obligations.

Section 161 of the Supplemental Pension Plans Act does not require a statement of the benefit obligations in the financial report. The Act provides for an actuarial valuation to determine the obligations. That is why the framework is said to be a special purpose framework.

The financial report must include:

• a statement of the financial position of the plan, which must be entitled Statement of Changes in Net Assets Available for Benefits;
• a statement of changes in the net assets available for benefits;

• a mention that the financial report was prepared in accordance with the accounting framework for that purpose indicated in the Guide to the Annual Information Return, published by Retraite Québec, pursuant to section 161 of the Supplemental Pension Plans

Framework with pension obligations (general purpose)

The plan administrator that chooses the general purpose framework must have financial statements prepared in accordance with the choice of the framework.

The financial statements must be entitled Financial Statements for "Name of the Pension Plan". They must comply with the Accounting Standards for Pension Plans of Section 4600, Pension Plans, in Part IV of the CPA Canada Handbook– Accounting.

The financial statements must include:

• a statement of the financial position of the plan;
• a statement of changes in the net assets available for benefits;

• a statement of changes in pension obligations, with a few exceptions;

• a mention that the financial statements were prepared in accordance with the Accounting Standards for Pension Plans of Section 4600, Pension Plans, in Part IV of the CPA Canada Handbook– Accounting.

Legal reference

• Section 161 of the Supplemental Pension Plans Act