Quebec’s National Assembly has passed Bill 39, which creates voluntary retirement savings plans (VRSPs) in the province. The intention of the bill is to provide employees access to an inexpensive vehicle allowing them to save for their retirement.
The implementation of VRSPs impacts employers with employees who are Quebec residents without a workplace savings plan for employees with one year of continuous service. The new law comes into force on July 1, 2014, but the deadline for introducing the VRSP depends on the size of the company as noted below:
- December 31, 2016 if they have at least 20 eligible employees on June 30, 2016
- December 31, 2017 if they have 10 to 19 eligible employees on June 30, 2017
- By a date to be determined, but not before January 1, 2018, if they have 5 to 9 eligible employees
Eligible employees are those with one year of uninterrupted service who do not already contribute to a RRSP, TFSA, or pension plan via payroll deductions at work. If the company’s Quebec employees were offered participation in an existing Group RRSP, TFSA, or pension plan the company would not be required to offer a VRSP.
If you offer an RRSP, TFSA, or pension plan to your Quebec employees currently…
The legislation indicates that while the employer has a responsibility to offer the plan to employees, if eligible employees do not make a definitive decision to opt out of the plan (in other words, they do not decide one way or the other), then the employer is required to enroll them in the plan and to deduct contributions.
Therefore, we recommend reminding all employees annually that they are eligible to participate in the plan and having them sign off on a waiver form each year indicating that they are continuing to choose to opt out of the plan and forego the employer contribution. The waiver forms should be kept in each employee’s personnel file.
If you do not offer an RRSP, TFS, or pension plan to your Quebec employees currently…
You will be required to establish an RRSP, TFSA, pension plan, or VRSP by the deadline noted above and to administer payroll deductions in the event that employees choose to participate in the plan.
Navigating the Canadian Retirement plan landscape can be challenging, particularly for employers who must make decisions regarding what type of program to offer their employees.
The Leslie Group is a full service benefits consulting firm that is, in keeping with market conditions and legislative changes, committed to providing you with the best advice needed to manage your group benefits program. We would be pleased to address any questions and can be reached at (416) 510-8966.