Quebec introduces bill for VRSPs

Jan. 2014 deadline for certain employers

Quebec has introduced a bill to establish voluntary retirement savings plans (VRSPs) in the province.

The plans would be accessible to all individuals, including self-employed workers and workers at employers that do not subscribe to such a plan.

Any individual may contribute to a VRSP, as may any employer on behalf of the employees. However, as of January 2014, employers must automatically enroll employees in the plan if they have five eligible employees or more who have one year of uninterrupted service, and if they do not have a registered retirement savings plan or tax-free savings account for which payroll deductions could be made, or a registered pension plan.

These employees, however, can opt out of the plan, said Bill 39.

Each plan member can determine his own rate of contribution to the plan. A member can discontinue contributions to the plan at any time or, under certain conditions, set her rate of contribution at zero per cent.

A member may, at any time, change his rate of contribution to the plan. However, he may not change the rate of contribution more than twice per 12-month period, unless the employer agrees that the member do so more often.

VRSPs would be administered by insurers, trust companies or investment fund managers and must be registered with the Régie des rentes du Québec.

"We believe this innovative solution might provide individuals and employers with a clear and simple retirement savings method,” said Charles Guay, president and CEO of Standard Life in Canada. “The voluntary feature values the employee's freedom of choice and the group feature promotes economies of scale for participants. Compulsory membership for businesses will be a significant contributor to the success of the VRSP. Governments, financial institutions, employers and workers will all benefit from working together for the long-term, financial well-being of Quebecers."

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