Canadian Payroll Reporter

CPR_JULY_2013V2:Canadian Employer.qxd 13-06-14 12:42 PM Page 8 JULY 2013 Quebec reviewing QPP report CANADIAN PAYROLL REPORTER www.payroll-reporter.com Continued from page 6 suspend vested benefits and, in addition to what is already permitted with respect to bridging benefits, to modify the pension indexation and the various subsidies. The committee further recommends with respect to such members that the employer and the members should have the option to agree not to take the wage development for any service years preceding the modification into account if a final salary pension plan is converted into a career salary pension plan. The committee recommends that the restructuring measures should cover the pension indexation, but the indexation of pensions in payment should be reduced or suspended only if less than 30 per cent of retirees object to the change. Collective bargaining and member consultation Where a plan covers unionized employees, the committee recommends the employee organization be permitted to negotiate reductions in the benefits for any service preceding the effective date of the collective agreement. With respect to nonunionized employees, reductions or suspensions of benefits should take effect only if they are subject to a consultation process and if less than 30 per cent of active or non-active members object to it. In order to prevent a plan from being terminated following restructuring once the solvency rate is restored, the committee recommends benefit reductions be cancelled if a plan is terminated within a period of 10 years following restructuring. Unilateral changes Starting from the fourth year of the five-year period following the implementation of the "enhanced funding" method, the committee recommends employers should have the 8 option of unilaterally modifying or eliminating the indexation of the benefits for past service. This option would apply to active members as well as retirees and beneficiaries. However, it should not affect benefits already paid and would apply only if the following conditions are met: •unilateral reduction of the indexation would apply in the same manner to current and future retirees with respect to past service •any changes made to the indexation should not reduce the funding deficiency by more than 50 per cent •the employer must have contributed financially to the plan in order to reduce the deficiency by the same percentage as the one arising from the reduction. Moreover, in order, once again, to prevent a plan from being terminated following restructuring, the Committee recommends the benefit reductions be cancelled if the plan is terminated within a period of 10 years of being restructured. Members who are under age 55 The Committee recommends it no longer be permitted to offer subsidized early retirement benefits for future service to members who are less than 55 years old. The committee further recommends abolishing the additional pension benefits arising from the test provided for in section 60.1 of the SPPA. The government has already indicated that the parliamentary committee will start reviewing the recommendations of the D'Amours Report on June 10 and that the committee is expected to deliver its report on Sept. 17. It remains to be seen which of the modifications recommended will be adopted and integrated into the Quebec legislative framework. Natalie BussiËre is a partner with Blakes Law Firm in Montreal. She can be contacted by email at natalie.bussiere@blakes.com or by telephone at (514) 982 4080. Published 12 times a year by Thomson Reuters Canada Ltd. Subscription rate: $179 per year Customer Service Tel: (416) 609-3800 (Toronto) (800) 387-5164 (outside Toronto) Fax: (416) 298-5106 E-mail: carswell.customerrelations@ thomsonreuters.com Website: www.carswell.com Canadian HR Reporter, a Thomson Reuters business One Corporate Plaza 2075 Kennedy Road, Toronto, Ontario, Canada M1T 3V4 Publisher: John Hobel Managing Editor: Todd Humber Editor: Zachary Pedersen zachary.pedersen@thomsonreuters.com (416) 649-9584 Marketing Manager: Mohammad Ali (416) 609-5866 mm.ali@thomsonreuters.com Circulation Co-ordinator: Travis Chan travis.chan@thomsonreuters.com (416) 609-5872 ©2013 Thomson Reuters Canada Ltd/ ISBN/ISSN: 978-0-7798-2810-4 All rights reserved. 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