Publication of the Draft Regulations Containing the Measures of Mitigation Relating to Supplemental Pension Plans in the Context of Covid-19
Context
In our April 16th issue of Benefits News & Commentary, we discussed various relief measures announced by pension regulators in different provinces. Click here to view this issue.
On July 15, 2020, the Gazette officielle du Québec published a draft regulation regarding measures relating to supplemental pension plans intending to mitigate the impact from the state of emergency declared on March 13, 2020, due to the COVID-19 pandemic. Interested parties are asked to provide their comments within 45 days following the publication of this draft regulation.
Transfer Restrictions
The draft regulation provides the same rules as those previously announced. Thus, all benefit settlements made between April 16, 2020, and December 31, 2020, must be calculated according to the degree of solvency estimated on March 31, 2020, or as at the last business day of the month prior to the date on which the value of a member’s benefit is established, if such date is later.
Administrative relief concerning filing dates
As announced in April, the deadlines for filing the following documents which would be due after March 12, 2020, but before January 1, 2021, are extended by three months: the annual member statements, the actuarial valuation report, the notice presenting the plan's financial position, the annual information return, a recovery plan and the convening of plan members and employers to their plan’s annual general meeting.
Actuarial Valuation report as at December 31, 2020
New information to what was previously announced by Retraite Québec, the draft regulation removes the requirement to produce an actuarial valuation report as of December 31, 2020, for plans whose funding level as at December 31, 2019, was less than 90%. In such a case, the plan must be subject to an actuarial valuation no later than December 31, 2021, and a notice presenting the plan's financial position as at December 31, 2020, must be produced.
Temporary Cessation
The draft regulation also provides for measures so that a temporary cessation of benefit accruals under a plan does not constitute a termination of active participation in cases where the temporary cessation relates to benefit accruals from July 15, 2020, begins in 2020 and lasts a maximum of 12 months.
Amendment to the service cost
Finally, the draft regulation provides that when an amendment is made to terminate required service cost contributions, the latter ceases to be paid as of the effective date of the amendment, even if the actuarial valuation report relating to this amendment has not been sent to Retraite Québec.
