Supplemental pension plans
In general, supplemental pension plans (private plans) are retirement plans set up by employers. They include
In parallel with supplemental pension plans
There are also "transfer instruments" . They are LIRAs (locked-in retirement accounts), LIFs (life income funds) and life annuities . Those instruments are used to receive, where necessary, amounts coming from supplemental pension plans.
Under the same law
Supplemental pension plans are governed by the Supplemental Pension Plans Act. The Act also provides the conditions that LIRAs, LIFs and life annuity contracts must respect in order to be admissible transfer instruments.
There are exceptions
Certain supplemental pension plans are not subject to the Act . They include provincial and federal public sector plans, (such as the RREGOP) and plans whose employees' activities fall under federal jurisdiction, for example in the areas of banking, air transportation and telecommunications.
Save and make a profit on your investments for retirement
Supplemental pension plans, LIRAs, LIFs and life annuity contracts complement the basic income that is paid by the public plans at retirement. It has been shown that the average person will need 70% of his or her income to maintain the same standard of living after retirement. If you earn more than 20 000 $ a year in 2006, the public plans will not provide enough to reach that level.
Basic income from public plans
- Québec public plan: If you have contributed to the Québec Pension Plan and you have reached age 60, you can receive your retirement pension from the Régie des rentes du Québec.
- Federal public plan: as of age 65, you will probably be entitled to an Old Age Security pension. This pension is paid to any person who has legal status in Canada and has lived in Canada for a minimum of 10 years.
Maximum pensionable earnings (MPE)
This refers to the maximum earnings on which workers in Québec contribute to the Québec Pension Plan for a given year. The MPE for 2006 is 42 100 $.
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For a person who earns the maximum pensionable earnings (MPE), that is, 42 100 $ in 2006, the public plans (QPP and OAS) represent about 40% of his or her income. If that person earns more than the MPE, the public plans will cover a lower percentage. Supplemental pension plans can therefore help to make up the difference.
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Under the supervision of the Régie des rentes du Québec
Supplemental pension plans, in their traditional or simplified form, LIRAs, LIFs and pension annuity contracts are under the supervision of the Régie. In this capacity, the Régie must:
- ensure that the plans are administered and run in accordance with the Act
- register plan texts, standard contracts for LIRAs and LIFs and any subsequent amendments
- examine the annual information returns and actuarial valuations
- inform plan administrators, members, beneficiaries, employers and any other interested persons
- encourage the establishment and improvement of pension plans
Other supervisory agencies
If a plan has workers in Québec and in another Canadian province or territory, it my be under the supervision of another agency, whose supervisory authority is similar to that of the Régie. In such a case, the other agency must act on behalf of the Régie to ensure that the rights of the plan's Québec workers are in conformity with the Supplemental Pension Plans Act.
The Régie offers you...
- essential information for understanding
- appropriate tools for plan administration
Our selection
Retirement savings instruments:
Transfer instruments:
Other useful links...