On January 4, 2018, the Regulation to amend the Regulation respecting supplemental pension plans came into force, filling a regulatory void in Quebec’s supplemental pension plans framework that lasted just over two years. This amendment brings the Regulation respecting supplemental pension plans (SPPA Regulation) up to speed with its enabling statute — the Act respecting supplemental pension plans (SPPA) — which had been amended by Bill 57 on January 1, 2016. Bill 57 introduced certain new concepts, such as the purchase of annuities to settle certain benefits and replaced solvency funding for defined benefit pension plans by going-concern funding reinforced by the inclusion of a stabilization provision.

The amended SPPA Regulation provides for new measures that address various issues of interest to pension plan administrators, including:

  • Funding policies
  • Annuity purchasing policies
  • Variable benefits
  • Contents of annual statements
  • Letters of credit
  • Prescribed topics for the annual meeting

This bulletin provides an overview of the notable changes made to the SPPA Regulation. Various other topics have also been addressed by the amendment, including contents of actuarial valuation reports, transfers of benefits between spouses, the elimination of references to the additional benefit and the adjustment of a member’s early benefit.


The SPPA Regulation now prescribes the requirements of the written funding policy provided for under the SPPA, which means that plan administrators will need to revise the funding policies that guide the pension committee in the performance of its funding-related duties.

With the increased stability that results from the new funding rules set out in the SPPA, plan administrators will want to seize this opportunity to clearly define the funding strategies for their defined benefit plans going forward.


The SPPA Regulation also sets out the requirements related to annuity purchasing policies in order to settle members’ benefits. It bears note that onerous funding rules have been prescribed, requiring an actuarial valuation before each annuity purchase and providing for “special annuity purchasing payments” into the pension fund to maintain the plan’s degree of solvency at the greater of its pre-purchase level or 100 per cent. Moreover, where the payment of benefits under an annuity purchasing policy would result in a reduction in the plan’s degree of solvency, a payment must first be made into the pension fund to maintain the degree of solvency at the higher of the aforementioned levels. In order to obtain a complete discharge from their obligations to plan members through payment of benefits pursuant to the purchase of annuities, plan administrators will need to implement a clear annuity purchasing policy that meets the requirements integrated into the SPPA Regulation.


Rules have been prescribed in respect of plans offering payment of variable benefits, with distinctions based on whether payment is made as a life income or as a temporary income. Plan administrators should take particular note of the additional disclosure obligations that apply to such plans. At the beginning of each year, members must be provided with statements containing specific information prescribed by the SPPA Regulation regarding variable benefit accounts, including the minimum and maximum withdrawal amounts and, in certain cases, prescribed declarations must be attached.


Various changes have also been made to the prescribed contents of annual statements. Going forward, information must be disclosed to plan members and, where applicable, to inactive members regarding the plan’s degree of solvency, any restrictions that apply to the exercise of transfer rights, the rules governing payment of the balance of benefits and the existence of an annuity purchasing policy.

The amendments regarding annual statements apply in respect of plan years ending after December 30, 2017. Accordingly, plan administrators will need to revise their annual statements to ensure continued compliance with the updated disclosure requirements.


The rules regarding the use of surplus assets to reduce the amount of letters of credit have been updated to reflect the SPPA’s new funding framework for defined benefit plans.


Considering the significant changes implemented to Quebec’s supplemental pension plans legislation over the past two years, corresponding topics must be added to the annual meeting agenda. For example, annual meetings will need to include a discussion of the main risks related to plan funding and the measures taken in the course of the fiscal year to manage such risks. Moreover, if annuities have been purchased under an annuity purchasing policy, the meeting agenda will need to include the number of annuities purchased, and for each purchase, the insurance premium charged, the criteria used for choosing both the annuities and the insurer, the degree of solvency of the plan before and after the purchase, and the amount of the special annuity purchasing payment (if applicable).


We wish to acknowledge the contribution of Terry Kyle Lapierre to this publication.