Retraite Quebec brings in measures for DB pensions
Retraite Quebec is implementing two temporary easing measures to help supplemental pension plan administrators during the coronavirus outbreak.
The measures involve extending deadlines for certain regulatory and legal obligations, as well as an update to the degree of solvency that must be taken into account for transfers and refunds under defined benefit pension plans.
Deadlines for annual statements for members and beneficiaries, triennial or annual actuarial valuations and actuarial valuations for an amendment to the plan or for the use of excess assets and notices regarding the plan’s financial situation, as well as notices of annual meetings are extended by three months, from Sept. 30, 2020 to Dec. 31.
Read: An overview of Canadian DB pension relief measures during coronavirus
The deadline for actuarial valuations for a purchase of annuities, which is normally four months from the date of purchase, is also extended by three months. And the deadline for actuarial valuations required by Retraite Quebec, which is normally within 60 days of the valuation, is also extended by three months.
Deadlines for actuarial valuations for a negotiated contribution plan and annual information returns and financial reports are extended from June 30 to Sept. 30.
Further, deadlines for recovery plans for negotiated contribution plans, normally required within 18 months of valuation, and applications for registration of amendments provided for in the recovery plan, usually required within 24 months of valuation, are also extended by three months.
Deadlines for termination reports and termination or employer withdrawal reports in the case of employer insolvency, normally required within 90 and 120 days of the termination or withdrawal, respectively, are also extended by three months.
Read: Feds urged to allow tax-deferred RRSP withdrawals during coronavirus
Retraite Quebec hasn’t extended the deadlines for sending a statement once an employee leaves or for filing a transfer application. Notably, the extensions apply to deadlines that hadn’t already expired by March 12, 2020, but which would otherwise expire this year.
The regulator noted the easing measures may be subject to specific legislative provisions once parliamentary proceedings resume.
On the solvency side, all payments — either transfers or refunds — between April 17 and Dec. 31, 2020 must take into account a degree of solvency that reflects the plan’s current financial situation. As such, payments must take into account the degree of solvency updated on the last working day of the month preceding the date on which the value of the member’s benefits was determined. However, if the date on which the value is determined is before April 1, the plan’s solvency must be determined based on a financial estimate as at March 31.
The degree of solvency must be determined by an actuary based on the plan’s estimated financial situation by taking the real rate of return of the pension fund into account, as well as changes to interest rates on a solvency basis, plus contributions made since the plan’s most recent complete actuarial evaluation.
Read: Are pension plans considering filing early valuations to lock in pre-coronavirus funded ratios?