On July 15, 2015, Finance Canada released a draft multi-lateral agreement respecting pooled registered pension plans ("Proposed Agreement") for public comments in a 45-day period. The Proposed Agreement was also published in the July 15, 2015 Gazette officielle du Québec (Part 2) for comments during the same period. The expressed purpose of the Proposed Agreement is to streamline the administration of pooled registered pension plans ("PRPPs"), resulting in reduced costs and greater access to PRPPs as a new private pension option. The Proposed Agreement does not have any impact until finalized and signed. Once the Proposed Agreement is signed and implemented, it affects federal and provincial PRPPs and, to a certain extent, Québec voluntary retirement savings plans ("VRSPs").

Below are certain key features of the Proposed Agreement.

  • A province is bound by the Proposed Agreement only if it signs the Proposed Agreement. At this stage, the Proposed Agreement contemplates that it will be signed by Alberta, British Columbia, Nova Scotia, Saskatchewan and Quebec. The usefulness of the Proposed Agreement depends on federal and provincial buy-in.
  • Certain licensing exemptions are available for a holder of a VRSP administrator licence (in which case, a licence to act as a federal or provincial PRPP administrator is not required) or a holder of a federal PRPP administrator licence (in which case, a provincial PRPP administrator licence is not required but a VRSP administrator licence is required with much simpler requirements). A holder of a provincial PRPP administrator licence is not exempted from obtaining a federal PRPP or a VRSP administrator licence.
  • A federally-registered PRPP text can be used as a provincial PRPP but not as a VRSP unless it is also registered with the Régie des rentes du Québec ("Régie"). A provincially registered PRPP text cannot be used as a federal PRPP or a VRSP without registration with the federal regulator or the Régie, as the case may be.
  • The supervisory authority of a provincial PRPP which is also registered as a federal PRPP is delegated to the federal regulator. The federal PRPP legislation applies to a federally-registered PRPP which is also used as a provincial PRPP except for specified matters (e.g., spousal rights, withdrawals, payments and transfers from a PRPP).
  • The Proposed Agreement also contains a mechanism for the subsequent addition of provincial parties and notice provisions regarding withdrawal and termination.

Our Pension and Benefits Group will monitor the progress of the Proposed Agreement.