On June 12, 2012, Bill C-25 (the Pooled Registered Pension Plans Act (Canada)) received third reading in the House of Commons. At the time of writing, Bill C-25 has not yet been passed by the Senate.
On the same day, Bill 80 (An Act respecting voluntary retirement savings plans) was introduced in the Québec legislature. As discussed in a previous edition of pensions@gowlings, a voluntary retirement savings plan (“VRSP”) is Québec’s name for a pooled registered pension plan.
Salient provisions of Bill 80 include the following:
- the administrator of a VRSP must register the plan with the Régie des rentes du Québec (the “Régie”)
- a plan administrator may only register one VRSP with the Régie.
- only certain licenced insurance companies, trust companies and investment fund managers may act as the administrator of a VRSP. Each such person must be specially licensed for this purpose by the Autorité des marches financiers, and the license application must include numerous things, including a five-year business plan relating to the VRSP, documentation relating to the net equity of the entity and, in certain cases, an irrevocable letter of credit in an amount to be prescribed.
- a VRSP must be provided on the same conditions and cost to all participating employers and members
- a VRSP must be provided at “low cost”. Regulations (which have not been released) will prescribe what this means, and the fees that may be charged to members (including those that may be deducted from the return on fund assets)
- most employers with more than 5 employees will be required to subscribe to a VRSP and offer participation in it to their employees, unless they already provide a group RRSP or registered pension plan to their employees.