| Legislation |
An Act respecting voluntary retirement savings plans and the Income Tax Act |
Income Tax Act |
Income Tax Act |
Income Tax Act |
Supplemental Pension Plans Act and its regulations and the Income Tax Act |
Supplemental Pension Plans Act and its regulations and the Income Tax Act |
| Regulatory bodies |
- Retraite Québec
- Commission des normes, de l'équité, de la santé et de la sécurité du travail (employer’s legal requirement to comply)
|
Canada Revenue Agency |
Canada Revenue Agency |
Canada Revenue Agency |
- Retraite Québec
- Canada Revenue Agency
|
- Retraite Québec
- Canada Revenue Agency
|
| Administrator1 |
- Insurer
- Trust company
- Investment fund manager
|
N/A |
N/A |
Three trustees, including a third party or trust company such as Industrial Alliance Trust Inc. |
Financial institution |
Pension committee if the plan numbers more than 25 participants, otherwise the employer |
| Type of plan |
Defined contributions in allocated accounts |
Defined contributions in allocated accounts |
Defined contributions in allocated accounts |
Defined contributions in allocated accounts |
Defined contributions in allocated accounts |
Defined contributions in allocated accounts |
| Eligibility |
The following people working or living in Quebec:
- Employed
- Self-employed workers
- Business owners
- Other investors
The administrator may not turn down an enrolment application. |
Sponsor’s option:
- All employees
or
- A group of employees
|
Sponsor’s option:
- All employees
or
- A group of employees age 18 or over who are Canadian residents
|
Sponsor's choice:
- All employees
or
- A group of employees excluding shareholders who own at least 10% of the shares and their families
|
Sponsor's choice:
- All employees
or
- A group of employees subject to minimum eligibility rules
|
Employer’s option, subject to minimum eligibility rules:
- All employees
or
- A group of employees
|
| Employer’s contribution |
- Optional
- No required minimum
|
- Optional
- No required minimum
|
- Optional
- No required minimum
|
- Determined in the plan
- Based on profits or a % of salaries
- No required minimum
|
- Mandatory
- Minimum of 1% of the payroll of participants
- Additional contribution permitted
|
- Mandatory
- Minimum of 1% of the payroll of participants
|
| Employee’s participation |
Automatic:
- Salaried workers in Quebec age 18 and over with at least one year of continuous service and who are not eligible for other plans
Optional:
- Other employees
- Self-employed workers
- Other savers
|
- Mandatory or optional, at the sponsor’s discretion
- Plan membership may be restricted to a group of employees.
|
- Optional
- Plan membership may be restricted to a group of employees.
|
- Mandatory or optional, at the employer’s discretion
- Plan membership may be restricted to a group of employees.
|
- Mandatory or optional, at the employer’s discretion
- Plan membership may be restricted to a group of employees.
|
- Mandatory or optional, at the employer’s discretion
- Plan membership may be restricted to a group of employees.
|
| Employee’s regular contribution |
- Rate or amount determined by member, or the default rate prescribed by regulation.
- Rate can be set at 0% according to certain criterias
|
- Member’s option
or
- According to an agreement with the employer
|
- Member’s option
or
- According to an agreement with the employer
|
Not permitted |
The employer decides whether or not to require employees to make contributions and determines the contribution amount, if any |
The employer decides whether or not to require employees to make contributions and determines the contribution amount, if any |
| Employee’s voluntary contribution |
Permitted |
Permitted |
Permitted |
Not permitted |
Permitted |
Permitted or not permitted in the plan, at the employer’s discretion |
| Contribution frequency |
Employees: no later than the last day of the month following the payroll deduction
Other members: set out in the agreement with the administrator
Employer: at least monthly, no later than the last day of the following month |
No requirement |
No requirement |
At the employer’s discretion |
Employee: no later than the last day of the month following the deduction
Employer: at least monthly, no later than the last day of the following month |
Monthly, on the last day of the following month at the latest |
| Ends of membership while employed |
Automatically registered employees have 60 days to opt out but can decide to rejoin at a later date. |
- Member’s option or
- According to the contract
|
Member’s option or according to the contract |
Employer’s option |
Mandatory plan: not permitted
Optional plan: determined in the plan, at the employer’s discretion |
Mandatory plan: not permitted
Optional plan: determined in the plan, at the employer’s discretion |
| Contribution limit |
Member: same limit as for an RRSP
Employer: RRSP ceiling set by the CRA, i.e. $26,230 in 2018 |
- 18% of income earned the previous year, subject to the limit under tax law, i.e., $26,230 in 2018.
- Limit is indexed annually
|
$5,500 per year, cumulative and indexed annually |
- 18% of income earned the current year, up to 50% of the DCPP limit, i.e., $13,250 in 2018.
- Limit is indexed annually
|
- 18% of income earned the current year, subject to the limit unider tax law, i.e., $26,500 in 2018.
- Limit is indexed annually
|
- 18% of income earned the current year, subject to the limit under tax law, i.e., $26,500 in 2018.
- Limit is indexed annually
|
| Tax treatment |
- Contributions are tax deductible for those who pay them
- Contributions and interest are tax deductible until withdrawal
- Employee contributions are deducted from salary before income tax
|
- Tax deductible contributions for the employee
- Contributions and interest sheltered from income tax until withdrawal
- Income tax exemption at source
|
- Savings grow tax-free
- Non-taxable withdrawals
- Contributions are not tax deductible
- Contributions deducted from salary after income tax
|
- Employer may deduct its contribution from its business income
- Contributions and income sheltered from income tax until withdrawal
|
- Tax deductible contributions for the contributor (employer or employee)
- Contributions and interest sheltered from income tax until withdrawal
|
- Tax deductible contributions for the contributor (employer or employee)
- Contributions and income sheltered from income tax until withdrawal
|
| Payroll tax |
No. The employer’s contributions do not increase the employee’s salary. |
Yes. The employer’s contributions increase the employee’s salary |
The employer cannot directly contribute to the employee’s TFSA. |
No |
No |
No |
| Vesting of employer’s contributions |
Immediate vesting, i.e., contributions belong to the member as soon as they are paid into the plan. |
Immediate vesting |
Immediate vesting |
At the employer’s discretion, after two years of membership at the most |
Immediate vesting |
Immediate vesting for employees who work in Quebec |
| Locking-in of contributions |
Contributions:
- Self-employed worker: No
- Employer: Yes
- Employee: No
|
Not locked in |
Not locked in |
Not locked in |
Contributions
- Employer: Yes
- Regular employee contributions: At the employer’s option
- Voluntary employee contributions: No
|
Contributions
- Employer: Yes
- Regular employee contributions: Yes
- Voluntary employee contributions: No
|
| Unlocking |
Members can receive a cash refund from their locked-in accounts in the following cases:
- Reduced life expectancy certified by a doctor
- Balance of locked-in account less than 20% of YMPE in year employment was terminated
- Members have not lived in Canada for at least two years
- Physical or mental disability certified by a doctor and member’s income in the 12 following months less than 40% of YMPE in the year they receive the reimbursement
- Upon request, accompanied by the declaration provided for in the regulations, if age 65 or more and the total amount of their locked-in retirement savings is less than or equal to 40% of YMPE in the year they make the request
|
N/A |
N/A |
N/A |
Members can receive a cash reimbursement from their locked-in accounts in the following cases:
- Balance of locked-in account less than 20% of YMPE in year employment was terminated
- Reduced life expectancy certified by a doctor
- Members have not lived in Canada for at least two years and have terminated their employment (only for an RPP)
While participating in an SPP, members age 55 and over can transfer all or part of their locked-in accounts to an LIF or LIRA or buy an annuity from an authorized provider. Members can request this once a year.
As of age 65, members can withdraw their mandatory and employer contributions if the total amount of their locked-in retirement savings is less than or equal to 40% of YMPE in the year they make the request . |
Members can receive a cash reimbursement from their locked-in accounts in the following cases:
- Balance of locked-in account less than 20% of YMPE in year employment was terminated
- Reduced life expectancy certified by a doctor
- Members have not lived in Canada for at least two years and have terminated their employment (only for an RPP)
While participating in an SPP, members age 55 and over can transfer all or part of their locked-in accounts to an LIF or LIRA or buy an annuity from an authorized provider. Members can request this once a year.
As of age 65, members can withdraw their mandatory and employer contributions if the total amount of their locked-in retirement savings is less than or equal to 40% of YMPE in the year they make the requesté. |
| Investment options |
- Single framework for all members and employers, determined by administrator
- Administrator must offer 3 to 5 options in addition to default option.
|
Determined by the sponsor |
Determined by the sponsor |
Determined by the employer |
- Determined by the employer
- The administrator must offer at least three diversified options presenting different degrees of risk and potential returns
|
Determined by the administrator |
| Default investment instructions |
Administrator must set a default, lifecycle-type guideline matching level of risk to member’s age. |
- Suggested by the CAP Guidelines
- Determined by the sponsor
|
- Suggested by the CAP Guidelines
- Determined by the sponsor
|
- Suggested by the CAP Guidelines
- Determined by the sponsor
|
- Suggested by the CAP Guidelines
- Determined by the sponsor
|
- Suggested by the CAP Guidelines
- Determined by the sponsor
|
| Choice of investments |
By the member |
- By the member
or
- According to the contract
|
By the member |
- By the employer
or
- By the member
|
By the member |
- By the administrator
or
- By the member
|
| Withdrawal of contributions during employment |
Member contributions: permitted at all times, unless plan limits withdrawals or transfers to one per 12 month period
Employer contributions: transfer to an eligible plan permitted when member reaches age 55 or the employer has set up other group plans |
Withdrawal permitted at all times, except if contractually restricted by the employer |
Permitted at all times |
Permitted or not permitted in the plan, based on the employer’s option |
Locked-in contributions: Prohibited; transfer to a locked-in product permitted starting at age 55
Voluntary contributions: Permitted at all times
Employee’s non-locked-in contributions:
a) Without restriction during employment: Permitted
b) With restrictions during employment: Transfer permitted for an HBP or LLP and total or partial withdrawal permitted starting at age 55 |
Not permitted, but the plan may permit withdrawal of the employee’s voluntary contributions during employment and withdrawal for progressive retirement |