Adoption of regulation for greater flexibility in the use of retirement savings in Quebec

On June 19, the Quebec government adopted the Regulation amending the Regulation respecting supplemental pension plans (Regulation), intended to offer greater flexibility in the use of retirement savings as of age 55.

The proposed Regulation, published December 27, 2023 (see our nb bulletin for more details), was adopted with few amendments and will come into effect January 1, 2025. In the proposed Regulation, the provisions relating to people aged 55 and older were scheduled to come into effect July 1, 2024.

As a reminder, this Regulation sets out new terms for withdrawal that would apply to life income funds (LIFs) and defined contribution (DC) pension plans offering variable benefits, which differ according to an individual’s age. Key takeaways of the Regulation are:

• Removal of the maximum annual withdrawal constraint for individuals age 55 and older with a LIF or a DC plan offering variable benefits.
• New rules for determining temporary income for people under age 55.
• No direct transfers from LIFs or DC plans offering variable benefits to RRSPs, RRIFs or VRSPs as of January 1, 2025.

As of January 1, 2025, financial institutions administering LIFs and pension committees of DC plans offering variable benefits will have an obligation to inform—as soon as possible—members who will be 55 or older on January 1, 2025, and those turning 55 in 2025, that there is no upper limit relating to withdrawals and that no amounts can be directly transferred from a LIF or DC plan offering variable benefits to an RRSP, RRIF or VRSP.

Overall, we welcome the adoption of this Regulation, which will allow for greater flexibility in the use of retirement savings while offering, among other things, new decumulation options at retirement.

Would you like more information? Contact your Normandin Beaudry expert or email us.