Quebec proposes a framework to allow pension plan contribution holidays

By Allen Minuskin
|CHRR, Guide to Pensions & Benefits|Last Updated: 04/12/2001

Quebec employers may finally get their wish if proposed changes to the Supplemental Pension Plan Act (SPPA) are passed. Bill 102 introduces a framework that will give employers the legal right to take contribution holidays. An employer takes a “contribution holiday” by using a portion of a pension plan’s surplus assets to reduce all or part of the company’s contribution to the plan.

Background

The right of an employer to take contribution holidays is not recognized or prohibited under the existing provisions of Quebec’s SPPA. Employers have essentially relied on plan documents as authority for taking contribution holidays, even though the applicable wording is fairly vague.