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Quebec Passes Voluntary Retirement Plan Bill 

Canadian Tax Adviser


December 10, 2013


Quebec has passed legislation to create voluntary retirement savings plans (VRSP), the province's version of pooled registered pension plans (PRPP). Under the new rules, any individual, and any employer on behalf of an employee, may contribute to a VRSP. In addition, companies in Quebec with five or more eligible employees must generally offer a workplace retirement plan. Although the Royal Assent version of Quebec Bill 39 is not yet available, it appears the new rules will generally become effective July 1, 2014.

Quebec reintroduced VRSP legislation in Bill 39, which was tabled on May 8, 2013. Previously, Quebec had included its version of the PRPP in Bill 80, which was tabled in June 2012 but died on the order paper when an election was called in Quebec.


PRPPs, including the VRSP, are intended to be a broad-based, low-cost, defined contribution pension vehicle that will be available to all employees, employers and self-employed individuals. The PRPP will offer these individuals the benefits of participating in a large pension plan like the defined contribution plans many large companies offer, and will also allow employers to offer retirement savings without the cost of setting up a pension plan and administering it.


Federal legislation for the PRPP framework, which provides a new option for tax-effective retirement savings for employees of small businesses and self-employed individuals who don't already have a company pension plan, was included in Bill C-45, which received Royal Assent on December 14, 2012.


Alberta and Saskatchewan have already passed enabling legislation to make PRPPs available in those provinces.


VRSP details
Under the new regime, employers with five or more eligible employees and who do not have a RRSP or a TFSA for which payroll deductions could be made, or an RPP, must automatically enroll those employees in a VRSP. The employees, however, have the right to renounce membership in the plan.


According to Quebec, registered VRSPs will be administered by authorized insurers, trust companies or investment fund managers. Each plan member may determine his or her rate of contribution to the plan. Where the administrator offers investment options in addition to the default investment option, a plan member may also determine the investment option that will apply in his or her case. The member can discontinue contributions to the plan at any time or, under certain conditions, set his or her rate of contribution at 0%.


For more information, contact your KPMG adviser.






Information is current to December 10, 2013. The information contained in this publication is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act upon such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's National Tax Centre at 416.777.8500


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