Supplemental pension plans

Certain factors such as the member's place of work (province or territory) and the employer's sector (public, private, parapublic, etc.) determine which law is applicable to the supplemental pension plan.

To find out if a benefit is payable, it is first necessary to find the pension plan of a previous employer.

If there is no bankruptcy

Except under certain conditions, the benefits accrued under a pension plan subject to the Supplemental Pension Plans Act are unseizable. They cannot be given as security. The amounts that come 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 into 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 that come from such a plan can be seized for :
  • the payment of a support debt (maximum 50 %)
  • partition of family patrimony
  • the payment of a compensatory allowance
• Additional 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 exempt from seizure. The same is true for RRSPs, RRIFs, LIRAs and LIFs.

Exception : for RRSPs, RRIFs, LIRAs and LIFs that would have been seizable if not for the bankruptcy (for example, an RRSP in which the amounts coming from the not locked-in SIPP account were transferred), the amounts paid into them in the 12 months preceding the bankruptcy are seizable.

No. The pension fund is not part of the employer's assets. It cannot be used to pay the creditors of the bankrupt employer.

If a business goes bankrupt, the pension plan is normally terminated and the pension fund is liquidated. If the employer owes money to the pension fund and the plan administrator is unable to recover the amounts due, it is possible that the benefits of members and beneficiaries affected by the termination may be reduced. Retraite Québec always follows this type of situation closely to ensure that the reduction of benefits, if any, is made correctly.

More information on the matter and on other corporate change (merger, restructuration, sale, closure, bankruptcy protection) is available.

Members cannot withdraw money because it is locked-in in order to provide a retirement income. A refund can be made under certain circumstances :

• Defined-benefit plan

• Defined-contribution plan

  OR

• Simplified pension plan (SIPP)

Members or beneficiaries of a pension plan are untraceable when the plan administrator tries to contact them unsuccessfully, which is the case when they leave without giving an address or when documents sent to them are returned. In order to rectify the situation, the plan administrator must file a request to find untraceable members or beneficiaries with Retraite Québec.

Under the Supplemental Pension Plans Act, the administrator must file a request to find untraceable members or beneficiaries when they are entitled to:

• a refund
• payment of a retirement pension
• payment of another benefit
• other amounts following the withdrawal of their employer party to the plan or the plan's termination (e.g., part of surplus assets following the termination of the plan).

However, the Act does not prevent the administrator from filing a request to find untraceable members or beneficiaries under other circumstances, for example, when annual statements are returned by mail.

Please consult the Request to find untraceable persons with Retraite Québec section to find all the required instructions.

In the context of the COVID-19 pandemic, temporary easing measures have been implemented to assist plan administrators.

The measures covering the pension plans are:

• extending deadlines for certain regulatory and legal obligations
• updating the degree of solvency that must be taken into account for payments (transfers and refunds) under defined-benefit pension plans
• maintaining the status of active members of a plan if there is a temporary suspension of the accrual of benefits or payment of contributions
• removing the requirement to produce an actuarial valuation as at 31 December 2020 for defined-benefit pension plans in the private sector whose funding level as at 31 December 2019 is less than 90%.

For additional information, consult the questions and answers on the temporary easing measures.