Canada: Quebec’s New Pension Reform Proposals: Effective Solutions In The Works?

As in many other jurisdictions in Canada, Quebec's pension landscape is in the midst of significant change driven by the issues of pension coverage, adequacy and sustainability. Notable highlights for 2013 included:

  • the release of a report by the pension expert committee mandated to analyze the state of Quebec's retirement income system and to make recommendations on how to improve it (D'Amours Report);
  • a special public consultation of the Committee on Public Finance on the D'Amours Report and the release of the Committee's own recommendations (French only);
  • a public consultation of the Committee on Public Finance on the "voluntary retirement savings plans" (or "VRSPs", Quebec's version of the pooled registered pension plans) and the adoption of Bill 39 allowing for the establishment of VRSPs effective July 1, 2014;
  • the adoption of regulations allowing for the establishment of single-employer target benefit plans in the pulp and paper industry;
  • a further extension of the "temporary" solvency relief measures for the years 2014 and 2015 for pension plans in the private, municipal and university sectors; and
  • the adoption of a series of new (and innovative) funding measures for pension plans in the municipal and university sectors.

Based on the new pension reform proposals announced last December by the Quebec government, 2014 could prove to be a decisive year in determining the future of the pension landscape in Quebec.

New Action Plan to Address the Sustainability of DB Plans

In the wake of the D'Amours Report, the key stakeholders in the pension industry (and the general population more broadly) seem to have reached a consensus that the status quo is no longer an option if we are to address the issue of the sustainability of defined benefit (DB) pension plans in Quebec. Building on this consensus, the Quebec government released a brief "action plan" on December 12, 2013 outlining the direction it intends to take to tackle this issue.

Framework for Restructuring Defined Benefit Plans

The most ambitious proposal in the government's action plan is certainly the attempt to establish a framework for restructuring DB plans. The restructuring process would be divided in four stages over a period of no more than two years according to the action plan.

  1. Between January and April 2014, three working groups will be formed (one for each of the private, municipal and university sectors). Each group will be composed of various stakeholders in the sector (e.g., employers, unions and other associations). The objective for each working group will be to: (i) determine which measures would most efficiently address the funding issues affecting DB plans in their respective sector; (ii) set parameters for the negotiation of the restructuring of DB plans in the sector; and (iii) determine the criteria that will guide the decisions of the Commission des relations de travail (Quebec Labour Relations Board) in connection with the arbitration process discussed in step 4 below.
  2. Between July 2014 and December 2014, a bargaining period will take place during which the parties will have to negotiate measures to make their DB plan more sustainable. It is still unclear which legislative changes to the Quebec Supplemental Pension Plans Act will be made to accommodate new solutions, retroactive adverse amendments, etc. The Minister did suggest that a renegotiation of accrued benefits may become an option in cases where a plan is in deficit.
  3. If an agreement cannot be reached by the parties before the end of the bargaining period (December 2014), a dispute resolution process will be triggered. The parties will then have to work with a mediator for up to six months to reach an agreement.
  4. If an agreement still cannot be reached after the mediation period (June 2015), the matter will be referred to Quebec's Labour Relations Board, which will be empowered to determine the measures to be implemented.

The government expects to table a first bill this spring to set out this restructuring framework formally (e.g., the duration of the various stages, the parameters for the dispute resolution process). A second bill could be tabled in the fall of 2014 to allow for the implementation of solutions recommended by the three working groups as well as some other recommendations from the D'Amours Report.


The Quebec government also intends to amend the funding rules for DB plans.

With respect to DB plans in the municipal and university sector, the government intends to impose a 50/50 cost-sharing arrangement between employers and employees. While all the details of this proposal are not yet known, one can reasonably expect that the employees' share will be limited to 50% of the normal cost related to future service (and not 50% of any required special payments). The current going-concern funding rules are expected to be maintained for the most part (i.e., no solvency funding required).

As for DB plans in the private sector, the government appears to be endorsing the concept of a single valuation basis. This would effectively lead to the elimination of the current solvency funding requirements for private sector DB plans and the adoption of an "enhanced" going-concern valuation, which would be a more stringent version of the current going-concern valuation.

Longevity Pension and QPP Enhancement

As discussed in a previous post, the expert committee had recommended the creation of a new public plan, alongside the Quebec Pension Plan (QPP), that would provide a defined benefit (the "longevity pension") to retired Quebec workers once they attain age 75. While the government seems open to discuss the idea further with its counterparts, it is clear that such a project would require a large degree of harmonization between provinces and the federal government, which will be quite difficult to achieve. While it did not say so in its action plan, the government appears to be more interested in discussing an enhancement of the QPP.


There is no doubt that a reform of the Quebec pension system is in the works, but with a minority government in place and an election looming, one can only be cautiously optimistic about the likelihood of such reform in 2014-2015 and the extent of the reform.

In particular, it must be noted that target benefit plans have unfortunately been left out of the government's action plan. While the private sector working group may try to bring this proposal to the table, the current government appears to have little appetite for this new type of pension plan at the moment. Considering that the government and the Régie des rentes have already gone through considerable efforts to develop a legal framework for target benefit plans in the pulp and paper industry, it is somewhat disappointing that they would not extend the concept to other industries and to multi-employer plans.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.