Announcement
December 6, 1999
Pension Benefits Act to "Structured" Group RRSPs
"Structured" Group RRSPs, under which an employer is required to make contributions and where such contributions are required to provide for a pension on retirement, qualify as a pension plan under the Pension Benefits Act.
Regular group RRSPs are not considered a pension plan because they are funded by employee contributions only. The employer's role is to provide for payroll deduction and to facilitate the administration of the plan.
The "structured" Group RRSPs prohibit employees from withdrawing any of the RRSP funds while they are employed and require that "employer" contributions must be used to provide a pension at retirement. Such restrictions create the illusion that a pension plan is being offered, but the regulatory requirements are not being met. Those requirements include: eligibility; uniform accrual; the provision of employee booklets; annual statements and statements on termination, retirement or death; spousal protection; creditor protection; and requirements for the employer to remit employer contributions to the plan on a monthly basis.
The Superintendent is notifying the financial services industry, employers and plan members that any plan that requires employer contributions, and is organized and administered to provide pensions for members, must be registered under the Pension Benefits Act.
For more information contact: Nancy MacNeill Smith, Superintendent of Pensions, at (902)424-4444 or e-mail: macneiln@gov.ns.ca
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