ARCHIVED — Vol. 146, No. 43 — October 27, 2012

Regulations Amending the Pooled Registered Pension Plans Regulations

Statutory authority

Pooled Registered Pension Plans Act

Sponsoring department

Department of Finance

REGULATORY IMPACT ANALYSIS STATEMENT

(This statement is not part of the Regulations.)

Issues and objectives

In December 2010, federal, provincial and territorial finance ministers agreed to move forward to introduce Pooled Registered Pension Plans (PRPPs) as an effective and appropriate way to help bridge existing gaps in the retirement income system.

The Pooled Registered Pension Plans Act (the “Act”) implements the federal portion of the framework for the establishment and administration of PRPPs. PRPPs will be professionally administered, defined contribution pension plans targeted toward employees and self-employed persons who do not have access to a workplace pension plan. In 2010, more than 5 million Canadians worked for small businesses and more than 2.5 million Canadians were self-employed. PRPPs would pool the funds in the accounts of participating employees and self-employed persons (i.e. members) to achieve low costs in relation to investment management and plan administration. PRPPs are intended to have design features which will remove traditional barriers that might have kept small- and medium-sized businesses from offering workplace pension plans to their employees in the past. In particular, the fiduciary obligations related to the management of the plan on behalf of plan members would be shifted from the employer to licensed administrators. In addition, responsibilities related to the professional administration of the plan would be borne by the licensed administrator.

The Act applies to PRPPs within the legislative authority of the federal government, such as PRPPs offered to employees in the telecommunications, banking and interprovincial transportation sectors. The Act also applies to persons employed in the Yukon, the Northwest Territories and Nunavut, including the self-employed. As with existing federally regulated registered pension plans, the Superintendent of Financial Institutions will be responsible for the supervision of federally regulated PRPPs. In order for PRPPs to be available to all employers, employees and the self-employed across Canada, provincial enabling legislation must also be implemented.

The Act provides regulation-making authority to the Governor in Council for PRPPs within federal jurisdiction. Regulations are required to prescribe details for the application of various provisions of the Act necessary for the implementation and administration of PRPPs.

The objective of the proposed Regulations Amending the Pooled Registered Pension Plans Regulations (the “proposed Regulations”) is to address provisions of the Act respecting

  • general requirements with respect to providing information;
  • the circumstances in which a member may withdraw funds from their PRPP account;
  • the circumstances in which a member may receive variable payments from the funds in their account;
  • the transfer options available to members and the conditions on the vehicles to which a member’s funds may be transferred;
  • the use of electronic means to satisfy requirements under the Act for communications with plan members; and
  • other technical rules related to the implementation of the framework.

The Pooled Registered Pension Plans Regulations (the “Regulations”) were published in the Canada Gazette, Part Ⅱ, on October 24, 2012, and address provisions of the Act respecting licensing, permitted investments, investment choices, permitted inducements, low cost, 0% contribution rate and rights to information. The Regulations, combined with the proposed amendments, would address all necessary provisions in order for PRPPs to be available to employees in sectors that are within the legislative authority of the federal government as well as persons employed in the Yukon, Northwest Territories and Nunavut.

Description

Disclosure requirements

Under the Act, notices have to be provided to employees, employers, administrators, and the Superintendent. These include a 30-day advance notice to the employees before an employer enters into a contract with an administrator to provide a PRPP. In addition, it requires notice be provided to the employees when they are automatically enrolled by their employer in a PRPP. Moreover, the Act provides that once employees are enrolled in a PRPP, they have the right to terminate their membership within 60 days of receiving notice that they have been enrolled.

To increase transparency, the proposed amendments would elaborate on the notice requirements provided by the Act. This includes content which is to be contained in the notice provided to employees before an employer enters into a contract with an administrator to offer a PRPP (e.g. expected effective date of the contract and the expected date that the contributions will begin) and the content of the notice to be provided to employees when they are automatically enrolled into a PRPP (e.g. the default contribution rate and a description of investment options that they can choose). The amendments would also provide that, when a member chooses to terminate his or her participation in a PRPP within the 60 days opt-out period, the member must notify his or her employer of the decision in writing.

Locking in

In order to ensure that members’ funds are available for retirement, the Act stipulates that members are not permitted to withdraw the funds in their accounts, or use the funds or any interest, or otherwise have a right to those funds. The Act stipulates an exception to this rule in the event of divorce or separation, or when members elect to transfer their funds or receive variable payments, as outlined below. In addition, the Act provides that the administrator may permit members to withdraw funds from their PRPP in case of disability or a small balance. The proposed amendments would define “disability” as a mental or physical condition that a physician has certified as being likely to shorten considerably the life expectancy of a member. The proposed amendments also would provide that members who have not been Canadian residents for at least two years and are no longer employed by an employer that is participating in a PRPP would not be subject to the locking-in rules, and would be permitted to withdraw the funds from their account.

Transfer of funds and purchase of life annuities

The Act provides members with the right to transfer funds from their PRPP account in certain circumstances. These circumstances include when the member is no longer employed by an employer who is participating in a plan (i.e. when a member retires or switches employers) and when the plan is terminated. Individuals who are not employees in a class of employees (i.e. self-employed persons) have the right to transfer funds from their PRPP account at any time. The Act also provides the survivor of a member with the right to transfer funds from the former member’s account.

The Act provides the transfer options available to a member or survivor when they have the right to transfer funds from their PRPP account. The transfer options include the following: the transfer of funds to another PRPP or another pension plan if that plan permits it; the transfer of funds to a retirement savings plan of the “prescribed kind”; and/or the use of funds to purchase an immediate or deferred life annuity of the “prescribed kind.” The proposed amendments would provide that the retirement savings plans of a “prescribed kind” would include locked-in registered retirement savings plans, life income funds, restricted life income funds, and restricted locked-in savings plans. The proposed amendments also would provide that, alternatively, funds may be used to purchase an immediate, or a deferred, life annuity.

The proposed amendments would place restrictions on the transfer of a member’s funds to the prescribed retirement savings plans to ensure that money saved inside a PRPP would be available to provide members, former members, and their survivors with income in retirement. In particular, it would not be possible to withdraw funds from these vehicles in lump-sum prior to retirement, except under exceptional circumstances (i.e. disability or severe financial hardship, small balance, or one-time unlocking privilege from a restricted life income fund for individuals 55 years of age and over). The proposed amendments would provide that funds transferred from a PRPP to a retirement savings plan or used to purchase an annuity could not be transferred or used as a security for any transaction except due to divorce or separation. In order to avoid administrative burden from multiple types of locking-in rules, the proposed conditions on retirement savings plans and annuities would be consistent with the conditions that apply to funds transferred from pension plans subject to the Pension Benefits Standards Act, 1985. In addition, the proposed amendments would provide that, in order to permit a member to purchase an annuity from the funds in his or her PRPP account, no benefit under an annuity could be surrendered or commuted during the lifetime of the annuitant, or the spouse or common-law partner of the annuitant, except in the case of an unexpired period of a guaranteed annuity where the annuitant is deceased.

Variable payments

In addition to a member’s rights respecting the transfer of funds from his or her account, the Act provides that administrators may (but are not obliged to) provide members who reach the “prescribed age” with the option to receive variable payments. A “variable payment” option offers members payments directly from funds in their plan as opposed to having funds transferred out to a retirement fund (e.g. a life income fund) or be used to purchase an annuity. The proposed amendments set this age at 55. The proposed amendments would provide that members who are at least 55 years of age, and who elect to receive variable payments, may choose the amount they will receive. This amount must be within a minimum determined by the Income Tax Act, and a maximum prescribed by the proposed amendments. The maximum payment for members between 55 and 90 years of age would depend on the member’s balance, the age of the individual, and the yield on Government of Canada marketable bonds for the first 15 years in which a member receives variable payments, and 6% thereafter. After 90 years of age, there would be no maximum on the variable payment amount. The payment amount would be calculated using a formula which is consistent with the formula used for calculating payment amounts for life income funds under the Pension Benefits Standards Regulations, 1985. If a member who opts to receive variable payments does not choose a payment amount for a year, the minimum amount, as determined under the Income Tax Act, would apply. Administrators that offer variable payments must notify members of their right to receive variable payments between 6 to 18 months before they reach 55 years of age.

Electronic communications

The Act provides that plan administrators may use electronic means to satisfy requirements under the Act for communications with plan members subject to the individual plan member’s consent. The proposed amendments would provide that the plan member must consent orally, in writing or electronically (e.g. email, secure Web site). The proposed amendments would require that prior to a plan member consenting, the administrator inform the plan member of when the consent takes effect. The proposed amendments would also require that the plan member may revoke his or her consent at any time, and that the plan member be responsible for informing the administrator of any changes to the designated information system (e.g. online account on a secure network), including any changes made to the contact information. Revocation of consent must be done orally, in writing, or electronically. In addition, the proposed amendments provide that in circumstances where an electronic document is provided on a generally accessible information system (e.g. secure or unsecure network), the member shall be given notice of its availability and location. The proposed amendments would provide that an electronic document is considered to have been provided to a plan member when it enters into, or is made available on, the information system designated by the plan member. If the administrator has reason to believe that addressee plan member has not received an electronic document (e.g. failure of email delivery notification), the administrator must mail the plan member a paper copy of the document.

Termination and winding-up

The Act provides details on the termination and winding-up of a PRPP. Specifically, the Act provides that, in the event of termination and wind-up, a termination report is required to ensure that the Office of the Superintendent of Financial Institutions (OSFI) has the necessary information to act in its role as the primary regulator of federally regulated private pension plans. The proposed amendments would provide that the termination report must be prepared by an actuary, accountant or other professional advisor.

Other technical rules related to the implementation of the framework

The proposed amendments would include the process for the provision of notices of objections and appeals in the event the Superintendent of Financial Institutions elects to revoke the registration and cancel the certificate of registration of a plan. The amendments would provide that, in the event of a notice of objection, the administrator must send two signed copies to the Superintendent of Financial Institutions of the notice of objection, by registered mail. In addition, the amendments would require that, in the event of a notice of appeal, the notice of appeal be in the form referred to in section 337 of the Federal Courts Rules, e.g. include the name of the court to which the appeal is taken, the name of the parties. In addition, the proposed amendments would provide that the employer must remit employee contributions to the administrator at least monthly, and the employer must remit its own contributions no later than 30 days after which the amount is required to be paid under the PRPP.

Consultation

The proposed amendments have benefited from review and collaborative discussions with provincial and territorial officials. Associations representing small businesses, employees, pension funds, financial institutions and other stakeholders have also provided their views for consideration throughout the development of the PRPP framework and the proposed Regulations.

Stakeholders provided comments through public consultations on the introduction of the PRPP framework, as well as written comments and dialogue throughout the development of the proposed amendments. The Minister of State (Finance) also met with small business owners and Chambers of Commerce across the country to answer questions and solicit feedback on PRPPs. Overall, reaction to PRPPs by various industry stakeholders and employers has been positive.

“One-for-One” Rule

The “One-for-One” Rule does not apply to the proposed amendments, as entry into the framework is voluntary.

Small business lens

The small business lens does not apply to the proposed Regulations, as employers’ participation in PRPPs is voluntary.

Rationale

The proposed amendments are required to prescribe details for the application of various provisions of the Act necessary for the implementation and administration of PRPPs. In order to facilitate transparency and comparability across PRPPs, the proposed amendments apply current industry standards for disclosure of PRPP information to members. To ensure that members’ funds are available for retirement, the Act and proposed amendments would require that members’ funds be locked in until retirement except under very limited circumstances. Similar to restrictions placed on life income funds under the Pension Benefits Standards Act, 1985, the proposed amendments place restrictions on the amount an individual can receive from his or her account in the form of variable payments to ensure that funds are available throughout retirement. To facilitate the exchange of information between administrators and members, the proposed amendments permit electronic communications as long as members agree to it. For purposes of providing clarity and transparency in the administration of PRPPs, the proposed amendments provide details on the form and content of notices that must be provided by administrators in certain circumstances under the Act.

Implementation, enforcement and service standards

The proposed amendments would apply to federally regulated PRPPs. The Superintendent of Financial Institutions, under the direction of the Minister of Finance, is responsible for the control and supervision of the administration of the Act. The Superintendent of Financial Institutions will be responsible for issuing licences to administrators, and has the authority to compel information, issue a direction of compliance, and terminate a PRPP as provided for in the Act. Through bilateral or multilateral agreements with provinces that enact similar legislation, the federal government could authorize the Superintendent of Financial Institutions to exercise any powers of a supervisory authority of a designated province, and authorize a supervisory authority of a designated province to exercise any of the Superintendent’s powers under the Act.

Contact

Leah Anderson
Director
Financial Sector Division
Department of Finance
L’Esplanade Laurier, East Tower, 20th Floor
140 O’Connor Street
Ottawa, Ontario
K1A 0G5
Telephone: 613-992-6516
Fax: 613-943-8436
Email: leah.anderson@fin.gc.ca

PROPOSED REGULATORY TEXT

Notice is given that the Governor in Council, pursuant to section 76 of the Pooled Registered Pension Plans Act (see footnote a), proposes to make the annexed Regulations Amending the Pooled Registered Pension Plans Regulations.

Interested persons may make representations concerning the proposed Regulations within 15 days after the date of publication of this notice. All such representations must cite the Canada Gazette, Part Ⅰ, and the date of publication of this notice, and be addressed to Leah Anderson, Director, Financial Sector Division, Finance Canada, L’Esplanade Laurier, 140 O’Connor Street, Ottawa, Ontario K1A 0G5 (tel.: 613-992-6516; fax: 613-943-8436; email: leah.anderson@fin.gc.ca).

Ottawa, October 18, 2012

JURICA ČAPKUN
Assistant Clerk of the Privy Council

REGULATIONS AMENDING THE POOLED REGISTERED
PENSION PLANS REGULATIONS

AMENDMENTS

1. (1) The portion of paragraph (c) of the French version of the Pooled Registered Pension Regulations (see footnote 1) before subparagraph (i) is replaced by the following:

  • c) une entité, autre que celle visée aux alinéas a) et b), qui remplit les conditions suivantes :

(2) Section 1 of the Regulations is amended by adding the following in alphabetical order:

  • “deferred life annuity”
    « prestation viagère différée »
  • “deferred life annuity” has the same meaning as in subsection 2(1) of the Pension Benefits Standards Regulations, 1985.
  • “immediate life annuity”
    « prestation viagère immédiate »
  • “immediate life annuity” has the same meaning as in subsection 2(1) of the Pension Benefits Standards Regulations, 1985.
  • “life income fund”
    « fonds de revenu viager »
  • “life income fund” means a registered retirement income fund that meets the conditions set out in section 41.
  • “locked-in RRSP”
    « REÉR immobilisé »
  • “locked-in RRSP” means a registered retirement savings plan that meets the conditions set out in section 38.
  • “registered retirement income fund”
    « fonds enregistré de revenu de retraite »
  • “registered retirement income fund” has the same meaning as in subsection 146.3(1) of the Income Tax Act.
  • “registered retirement savings plan”
    « régime enregistré d’épargne retraite »
  • “registered retirement savings plan” has the same meaning as in subsection 146(1) of the Income Tax Act.
  • “restricted life income fund”
    « fonds de revenu viager restreint »
  • “restricted life income fund” means a registered retirement income fund that meets the conditions set out in section 40.
  • “restricted locked-in savings plan”
    « régime d’épargne immobilisée restreint »
  • “restricted locked-in savings plan” means a registered retirement savings plan that meets the conditions set out in section 39.

2. (1) Subparagraph 7(a)(ii) of the French version of the Regulations is replaced by the following:

  • (ii) le nombre de régimes qu’elle compte faire agréer à titre de RPAC,

(2) Paragraph 7(e) of the French version of the Regulations is replaced by the following:

  • e) ses dirigeants et ses administrateurs jouissent d’une bonne réputation, ayant fait preuve d’un comportement honnête, intègre et éthique dans toutes leurs activités professionnelles;

3. Subsection 9(1) of the French version of the Regulations is replaced by the following:

(1) L’administrateur d’un RPAC ne peut, directement ou indirectement, effectuer des placements totalisant plus de 10 % de la valeur marchande des fonds détenus dans le compte d’un participant auprès des personnes ci-aprés ou prêter à l’une d’elles une somme dépassant cette limite :

4. Paragraphs 16(2)(a) and (b) of the French version of the Regulations are replaced by the following:

  • a) soit un fonds équilibré;

  • b) soit un portefeuille de placements tenant compte de l’âge du participant.

5. (1) Subsections 18(1) and (2) of the French version of the Regulations are replaced by the following:

Abandon d’option de placement

18. (1) L’administrateur avise le participant par écrit dès que possible après que l’administrateur prend connaissance de l’abandon d’une option de placement de celui-ci.

Option de placement par défaut

(2) Si le participant ne choisit pas de nouvelle option de placement dans les soixante jours suivant la date de réception de l’avis, l’administrateur du RPAC place ses fonds dans une option semblable à l’option initiale ou dans l’option de placement par défaut.

(2) Section 18 of the Regulations is amended by adding the following after subsection (3):

Content of notice

(4) The notice must

  • (a) for each investment option that is still available, include the description required under paragraph 23(c);

  • (b) indicate that the member has 60 days after the day on which the notice is received to choose another option; and

  • (c) indicate the administrator’s obligations under subsection (2) if the member does not choose another option within that time.

6. The portion of section 19 of the French version of the Regulations before paragraph (b) is replaced by the following:

Incitatifs autorisés

19. Un administrateur peut donner, offrir ou convenir de donner ou d’offrir à un employeur, pour l’amener à conclure un contrat avec lui en vue d’offrir un RPAC et l’employeur peut exiger, accepter, convenir ou offrir d’accepter de l’administrateur, pour conclure un contrat avec ce dernier à cette même fin :

  • a) un produit ou un service — est plus avantageux que ne l’aurait été ce même produit ou service sans la conclusion d’une entente de RPAC et l’avantage est le même pour tout employé admissible au RPAC;

7. The portion of section 20 of the French version of the Regulations before paragraph (a) is replaced by the following:

20. Les critères ci-après servent à établir si un RPAC offert aux participants est peu coûteux :

8. Paragraph 21(4)(b) of the French version of the Regulations is replaced by the following:

  • b) dans les quatre-vingt-dix jours précédant le rétablissement des cotisations, il transmet au participant un avis indiquant la date de la reprise des cotisations et leur taux.

9. The heading before section 22 and sections 22 to 25 of the Regulations are replaced by the following:

GENERAL REQUIREMENTS

Advance notice to employees

22. The notice required under subsection 41(1) of the Act must

  • (a) include the expected effective date of the contract;

  • (b) include the expected date that contributions will begin to be deducted;

  • (c) inform the employees that once the employer enters into the contract with the administrator, employees will be automatically enrolled and become members of the PRPP;

  • (d) inform the employees of the notice requirement under subsection 41(2) of the Act and who will send it;

  • (e) inform the employees of a member’s right to terminate their membership in the PRPP by notifying the employer within 60 days after the day on which the notice that is referred to in subsection 41(2) of the Act is received; and

  • (f) inform the employees of the existence of any deposit accounts, loans, letters of credit or insurance policies that are held by the employer with the administrator.

Notice of plan membership

23. For the purposes of paragraph 41(2)(b) of the Act, the notice must

  • (a) inform the employee of the notice requirements set out in section 32 and include a form that would meet those requirements if completed by the employee;

  • (b) indicate that if an administrator offers investment options, a member who has not communicated an investment choice within 60 days after the day on which the notice is received will be enrolled in the default option;

  • (c) include a description of each investment option that indicates
    • (i) its investment objective,

    • (ii) the type of investments and the degree of risk associated with the option,

    • (iii) its top ten holdings by market value,

    • (iv) its performance history,

    • (v) that its past performance is not necessarily an indication of future performance,

    • (vi) the name and a description of the benchmark that best reflects the composition of the investment option,

    • (vii) the cost charged by the investment option expressed as a percentage or a fixed amount, and

    • (viii) its target asset allocation;
  • (d) indicate the contribution rates offered to members;

  • (e) indicate the default contribution rate if a member does not make a choice;

  • (f) indicate the contribution rate of the employer;

  • (g) indicate the date when contributions will begin to be deducted;

  • (h) explain the members’ right to set their contribution rate to zero;

  • (i) explain how the contributions may be adjusted;

  • (j) include a list of any fees, levies, or other charges that would be triggered by the action of a member;

  • (k) explain the locking-in provisions of the PRPP;

  • (l) provide the address of the Financial Consumer Agency of Canada’s web page pertaining to the cost of PRPPs;

  • (m) explain a member’s right to opt back into the PRPP; and

  • (n) explain how to obtain more information about the PRPP.

Explanation of PRPP

24. A PRPP must provide that the explanation referred to in subparagraph 57(1)(a)(i) of the Act shall be provided

  • (a) along with the notice required under section 41(2) of the Act;

  • (b) on a website; and

  • (c) on request, directly to the member.

Information to be provided

25. For the purposes of subparagraph 57(1)(a)(ii) of the Act, a PRPP must provide

  • (a) that each member and each employer shall be given on a website and, on request, directly to the member, a description of
    • (i) each investment option in accordance with paragraph 23(c),

    • (ii) the transfer options available to the member and the costs associated with those options, and

    • (iii) any fees, levies or other charges that would be triggered by the actions of the member; and
  • (b) that each member shall be given, if the PRPP provides for variable payments, a statement, between 6 and 18 months before the member turns 55, that indicates
    • (i) the member’s right to elect to receive variable payments starting at age 55, and

    • (ii) how more information in relation to variable payments may be obtained; and
  • (c) that each member will be given, on request, the details of any transactions that have occurred in the member’s account, including any fees, levies or other charges incurred.

Prescribed information — written statement

26. For the purposes of subparagraph 57(1)(b)(ii) of the Act, the written statement must show

  • (a) the investment option of the member;

  • (b) the account balance information for the year, including the opening balance, contributions, the change in the value of the investments, net of costs, and the closing balance;

  • (c) for a member who elects to receive variable payments,
    • (i) the date of birth used to determine the minimum variable payment,

    • (ii) the name of the member’s spouse or common-law partner or designated beneficiary, if any,

    • (iii) the date the variable payment began to be paid,

    • (iv) the minimum and maximum allowable variable payment as well as the variable payment that the member is to receive,

    • (v) the investment options from which the variable payments were made and in what proportion they were made from each option,

    • (vi) the payment frequency over the year,

    • (vii) an indication of how the member may change their election regarding the amount to be paid during the year and from which investment option the amount is to be paid, and

    • (viii) a list of the transfer options available under subsection 50(1) of the Act;
  • (d) a summary of any transactions for the year;

  • (e) the name and a description of the benchmark that best reflects the composition of the member’s investment option as well as an explanation of the choice of the benchmark;

  • (f) the performance history of the member’s investment option over 1, 3, 5 and 10 years compared to that of the benchmark;

  • (g) the degree of risk associated with the investment option;

  • (h) a statement that past performance of the investment option is not necessarily an indication of future performance;

  • (i) any costs, expressed as a fixed amount or percentage;

  • (j) any fees, levies or other charges triggered by the actions of the member;

  • (k) how to obtain the information referred to in this section; and

  • (l) the member’s and employer’s contribution rates, expressed as a percentage.

Information return — prescribed information

27. For the purposes of subsection 58(1) of the Act, an information return must contain

  • (a) a list of the investment options offered by the administrator that identifies the default option;

  • (b) the performance history of the investment option;

  • (c) any costs, expressed as a percentage or a fixed amount;

  • (d) a list of any fees, levies or charges triggered by the actions of a member;

  • (e) a statement of the total assets of the PRPP and of the amounts held in each investment option;

  • (f) a statement of the asset allocation in each investment option and a list of the investments held in each investment option;

  • (g) the default contribution rate set by the administrator;

  • (h) a list of the employers who are participating in the PRPP;

  • (i) the number of members in the PRPP;

  • (j) an auditor’s report on the assets of the PRPP; and

  • (k) a certificate of the administrator or of any person preparing, compiling or filing any information on their behalf that certifies that the information provided to the Superintendent is accurate.

REMITTANCES

Employee contributions

28. An employer must remit employee contributions to the administrator no later than 30 days after the end of the period in respect of which the contributions were deducted.

Employer contributions

29. An employer must remit employer contributions to the administrator at least monthly and no later than 30 days after the end of the period in respect of which the amount is required to be paid under the PRPP.

Notice — breach of contract

30. The notice required under section 18 of the Act is to be provided no more than 30 days after the failure to comply with the provisions of the contract.

Notice — termination by employer

31. The notice required under section 19 of the Act is to be provided no more than 180 days and no less than 30 days before the effective date of termination of participation in the PRPP.

Notice — termination by employee

32. The notice required under subsection 41(5) of the Act is to be in writing and shall include

  • (a) the date and the employee’s date of birth and signature; and

  • (b) a statement that the employee has decided to terminate their membership in the PRPP.

Statement on termination or death

33. For the purposes of paragraph 57(1)(d) and (e) of the Act, the statement must provide

  • (a) the account balance information for the current year, including the opening balance, contributions, the change in the value of the investments, net of costs, and the closing balance on the date of the termination or death;

  • (b) the amount of any variable payments made from the account during that year;

  • (c) a statement that the balance on the date of termination or death is not final and may fluctuate;

  • (d) a summary of any transactions for that year; and

  • (e) the transfer out options available and information on how to transfer the funds.

LOCKING IN

Residency requirement

34. The provisions of a PRPP that are required by section 47 of the Act do not apply to an account if the member who holds the account has ceased to be a resident of Canada for at least two years and is no longer employed by an employer that is participating in the PRPP.

Disability

35. For the purposes of paragraph 47(2)(a) of the Act, “disability” means a mental or physical condition that a physician has certified as being likely to shorten considerably the life expectancy of a member.

VARIABLE PAYMENTS

Prescribed age

36. The age of 55 years is prescribed for the purposes of section 48 of the Act as the age at which a member may elect to receive variable payments from the funds in their account.

Amount of payment

37. (1) A member who has elected to receive variable payments may decide the amount that they are to receive as a variable payment for any calendar year.

Parameters of payment

(2) The payment is to be no less than the minimum required under subsection 8506(5) of the Income Tax Regulations and, for any calendar year before the year in which the member reaches 90 years of age, no more than the amount determined by the following formula:

A × B

where

A is, for the first calendar year, the balance in the member’s account at the time a variable payment arrangement is entered into and, for every subsequent calendar year, that balance at the beginning of the calendar year, and

B is

  • (a) for each of the first 15 years, less than or equal to the monthly average yield on Government of Canada marketable bonds of maturity over 10 years, as published by the Bank of Canada, for the month of November before the beginning of each calendar year, and

  • (b) for any subsequent year, not more than 6%.

Default amount

(3) If a member has not notified the administrator of the amount to be paid as a variable payment for a calendar year within 90 days after the day on which the statement required under paragraph 57(1)(b) of the Act is received, the minimum amount determined under subsection 8506(5) of the Income Tax Regulations is to be paid as a variable payment for that year.

Initial year

(4) For the calendar year in which the variable payment is established, the amount to be paid is multiplied by the number of months remaining in that year and then divided by 12, with any part of an incomplete month counting as one month.

TRANSFER OF FUNDS AND PURCHASE OF LIFE ANNUITIES

Prescribed locked-in registered retirement savings plan

38. (1) For the purposes of paragraphs 50(1)(b), 50(3)(b), 53(4)(b) and 54(2)(b) of the Act, the funds in a member’s account may be transferred to a locked-in RRSP that

  • (a) provides that the funds may only be
    • (i) transferred to another locked-in RRSP,
    • (ii) transferred to a pension plan, if the pension plan permits such a transfer and if the pension plan administers the benefit attributed to the transferred funds as if the benefit were that of a pension plan member,
    • (iii) transferred to a PRPP,
    • (iv) used to purchase an immediate life annuity or a deferred life annuity, or
    • (v) transferred to a life income fund or to a restricted life income fund;
  • (b) provides that, on the death of the holder of the locked-in RRSP, the funds shall be paid to the survivor of the holder by
    • (i) transferring the funds to another locked-in RRSP,
    • (ii) transferring the funds to a pension plan, if the pension plan permits such a transfer and if the pension plan administers the benefit attributed to the transferred funds as if the benefit were that of a pension plan member,
    • (iii) transferring the funds to a PRPP,
    • (iv) using the funds to purchase an immediate life annuity or a deferred life annuity, or
    • (v) transferring the funds to a life income fund or to a restricted life income fund;
  • (c) provides that, except as provided in subsection 53(3) of the Act, the funds, or any interest or right in those funds, shall not be transferred, charged, attached, anticipated or given as security and that any transaction appearing to do so is void or, in Quebec, null;
  • (d) sets out the method of determining the value of the locked-in RRSP, including the valuation method used to establish its value on death or on a transfer of assets; and
  • (e) provides that the holder of the locked-in RRSP may withdraw an amount from that plan up to the lesser of the amount determined by the formula set out in subsection (2) and 50% of the Year’s Maximum Pensionable Earnings minus any amount withdrawn in the calendar year under this paragraph or under paragraphs 39(1)(f), 40(1)(k) or 41(1)(k) and
    • (i) if the holder certifies that they have not made a withdrawal in the calendar year under this paragraph or under paragraphs 39(1)(f), 40(1)(k) or 41(1)(k) other than within the last 30 days before the day on which the certification is made,
    • (ii) if,
      • (A) in the event that the value of M in subsection (2) is greater than zero,
        • (I) the holder certifies that they expect
          to make expenditures on medical or disability-related treatment or adaptive technology during the calendar year in excess of 20% of the holder’s expected income for that calendar year determined in accordance with the Income Tax Act, other than any amount withdrawn in the calendar year under this paragraph or under paragraphs 39(1)(f), 40(1)(k) or 41(1)(k), and
        • (II) a physician certifies that the medical or disability-related treatment or adaptive technology is required, or
      • (B) the holder’s expected income for the calendar year determined in accordance with the Income Tax Act — other than any amount withdrawn under this paragraph or paragraph 39(1)(f), 40(1)(k) or 41(1)(k) within the last 30 days before the day on which the certification is made — is less than three quarters of the Year’s Maximum Pensionable Earnings, and
    • (iii) if the holder gives a copy of Form 1 and Form 2 of the schedule to the financial institution with whom the contract or arrangement for the locked-in RRSP was entered into.

Amount

(2) The relevant amount for the purposes of paragraphs (1)(e), 39(1)(f), 40(1)(k) or 41(1)(k) is the amount determined by the following formula:

M + N

where

M is the total amount of the expenditures that the holder expects to make on medical or disability-related treatment or adaptive technology during the calendar year, and

N is the greater of zero and the amount determined by the formula

P − Q

where

P is 50% of the Year’s Maximum Pensionable Earnings, and

Q is two-thirds of the holder’s total expected income for the calendar year determined in accordance with the Income Tax Act, other than any amount withdrawn in the calendar year under paragraph (1)(e), 39(1)(f), 40(1)(k) or 41(1)(k).

Lump sum

(3) The locked-in RRSP may provide that, if a physician certifies that owing to mental or physical disability the life expectancy of the holder is likely to be shortened considerably, the funds may be paid to the holder in a lump sum.

Prescribed restricted locked in savings plan

39. (1) For the purposes of paragraphs 50(1)(b), 50(3)(b), 53(4)(b), and 54(2)(b) of the Act, the funds in the member’s account may be transferred to a restricted locked-in savings plan that

  • (a) provides that the funds may only be
    • (i) transferred to another restricted locked-in savings plan,
    • (ii) transferred to a pension plan if the plan permits such a transfer and if the pension plan administers the benefit attributed to the transferred funds as if the benefit were that of a pension plan member,
    • (iii) transferred to a PRPP,
    • (iv) used to purchase an immediate life annuity or a deferred life annuity, or
    • (v) transferred to a restricted life income fund;
  • (b) provides that, on the death of the holder of the restricted locked-in savings plan, the funds shall be paid to the survivor of the holder by
    • (i) transferring the funds to another restricted locked-in savings plan or to a locked-in RRSP,
    • (ii) transferring the funds to a pension plan, if the pension plan permits such a transfer and if the pension plan administers the benefit attributed to the transferred funds as if the benefit were that of a pension plan member,
    • (iii) transferring the funds to a PRPP,
    • (iv) using the funds to purchase an immediate life annuity or a deferred life annuity, or
    • (v) transferring the funds to a life income fund or to a restricted life income fund;
  • (c) provides that, except as provided in subsection 53(3) of the Act, the funds, or any interest or right in those funds, shall not be transferred, charged, attached, anticipated or given as security and that any transaction appearing to do so is void or, in Quebec, null;

  • (d) sets out the method of determining the value of the restricted locked in savings plan, including the valuation method used to establish its value on death or on a transfer of assets;

  • (e) provides that, in the calendar year in which the holder of the restricted locked-in savings plan reaches 55 years of age or in any subsequent calendar year, the funds may be paid to the holder in a lump sum if the holder
    • (i) certifies that the total value of all assets in all locked-in RRSPs, life income funds, restricted locked-in savings plans and restricted life income funds that were created as a result of the transfer, a transfer under the Pension Benefits Standards Act, 1985 or a transfer from another PRPP, is less than or equal to 50% of the Year’s Maximum Pensionable Earnings, and
    • (ii) gives a copy of Form 2 and Form 3 of the schedule to the financial institution with whom the contract or arrangement for the restricted locked-in savings plan was entered into; and
  • (f) provides that the holder of the restricted locked-in savings plan may withdraw an amount from that plan up to the lesser of the amount determined by the formula set out in subsection 38(2) and 50% of the Year’s Maximum Pensionable Earnings minus any amount withdrawn in the calendar year under this paragraph or under paragraph 38(1)(e), 40(1)(k) or 41(1)(k)
    • (i) if the holder certifies that they have not made a withdrawal in the calendar year under this paragraph or under paragraph 38(1)(e), 40(1)(k) or 41(1)(k) other than within the last 30 days before the day on which the certification is made,
    • (ii) if,
      • (A) in the event that the value of M in subsection 38(2) is greater than zero,
        • (I) the holder certifies that they expect to make expenditures on medical or
          disability-related treatment or adaptive technology for the calendar year in excess of 20% of the holder’s expected income for that calendar year determined in accordance with the Income Tax Act, other than any amount withdrawn in the calendar year under this paragraph or under paragraph 38(1)(e), 40(1)(k) or 41(1)(k), and
        • (II) a physician certifies that the medical or disability-related treatment or adaptive technology is required, or
      • (B) the holder’s expected income for the calendar year determined in accordance with the Income Tax Act — other than any amount withdrawn under this paragraph or paragraphs 38(1)(e), 40(1)(k) or 41(1)(k) within the last 30 days before the day on which the certification is made — is less than three-quarters of the Year’s Maximum Pensionable Earnings, and
    • (iii) if the holder gives a copy of Form 1 and Form 2 of the schedule to the financial institution with whom the contract or arrangement for the restricted locked-in savings plan was entered into.

Lump sum

(2) The restricted locked-in savings plan may provide that, if a physician certifies that owing to mental or physical disability the life expectancy of the holder is likely to be shortened considerably, the funds may be paid to the holder in a lump sum.

Prescribed restricted life income fund

40. (1) For the purposes of paragraphs 50(1)(b), 50(3)(b), 53(4)(b), and 54(2)(b) of the Act, the funds in the member’s account may be transferred to a restricted life income fund that

  • (a) sets out the method of determining the value of the restricted life income fund, including the valuation method used to establish its value on death or on a transfer of assets;
  • (b) provides that the holder of the restricted life income fund shall, at the beginning of each calendar year or at any other time agreed on by the financial institution with whom the contract or arrangement was entered into, decide the amount to be paid out of the fund in that year;
  • (c) provides that, in the event that the holder of the restricted life income fund does not notify the financial institution with whom the contract or arrangement for the restricted life income fund was entered into of the amount to be paid out of the fund in a calendar year, the minimum amount determined in accordance with the Income Tax Act shall be paid out in that year;
  • (d) provides that, for any calendar year before the calendar year in which the holder of the restricted life income fund reaches 90 years of age, the amount of income paid out of the life income fund shall not exceed the amount determined by the following formula

A × B

where

A is, for the first calendar year, the balance in the member’s account at the date when the initial amount was transferred into the restricted life income fund and, for every subsequent calendar year, that balance at the beginning of the calendar year, and

B is

  • (a) for each of the first 15 years, less than or equal to the monthly average yield on Government of Canada marketable bonds of maturity over 10 years, as published by the Bank of Canada, for the month of November before the beginning of each calendar year, and

  • (b) for any subsequent year, not more than 6%.
  • (e) provides that, for the calendar year in which the contract or arrangement was entered into, the amount determined under paragraph (d) shall be multiplied by the number of months remaining in that year and then divided by 12, with any part of an incomplete month counting as one month;

  • (f) provides that if, at the time the restricted life income fund was established, part of the fund was composed of funds that had been held in another restricted life income fund of the holder earlier in the calendar year in which the fund was established, the amount determined under paragraph (d) is deemed to be zero in respect of that part of the fund for that calendar year;

  • (g) provides that the funds in the restricted life income fund may only be

    • (i) transferred to another restricted life income fund,
    • (ii) transferred to a restricted locked-in savings plan, or
    • (iii) used to purchase an immediate life annuity or a deferred life annuity;
  • (h) provides that, on the death of the holder of the restricted life income fund, the funds in that fund shall be paid to the survivor of the holder by

    • (i) transferring the funds to another restricted life income fund or to a life income fund,
    • (ii) transferring the funds to a locked-in RRSP or to a restricted locked-in savings plan, or
    • (iii) using the funds to purchase an immediate life annuity or a deferred life annuity;
  • (i) provides that, except as provided in subsection 53(3) of the Act, the funds or any interest or right in those funds, shall not be transferred, charged, attached, anticipated or given as security and that any transaction appearing to do so is void or, in Quebec, null;
  • (j) provides that, in the calendar year in which the holder of the restricted life income fund reaches 55 years of age or in any subsequent calendar year, the funds may be paid to the holder in a lump sum if the holder

    • (i) certifies that the total value of all assets in all locked-in registered retirement savings plans, life income funds, restricted locked-in savings plans and restricted life income funds that were created as a result of the transfer, a transfer under the Pension Benefits Standard Act, 1985 or a transfer from another PRPP, is less than or equal to 50% of the Year’s Maximum Pensionable Earnings, and
    • (ii) gives a copy of Form 2 and Form 3 of the Schedule to the financial institution with whom the contract or arrangement for the restricted life income fund was entered into;
  • (k) provides that the holder of the restricted life income fund may withdraw an amount from that fund up to the lesser of the amount determined by the formula set out in subsection 38(2) and 50% of the Year’s Maximum Pensionable Earnings minus any amount withdrawn in the calendar year under this paragraph or under paragraph 38(1)(e), 39(1)(f) or 41(1)(k)

    • (i) if the holder certifies that they have not made a withdrawal in the calendar year under this paragraph or under paragraph 38(1)(e), 39(1)(f) or 41(1)(k) other than within the last 30 days before the day on which the certification is made,
    • (ii) if,

      • (A) in the event that the value of M in subsection 38(2) is greater than zero,

        • (I) the holder certifies that they expect to make expenditures on medical or disability-related treatment or adaptive technology during the calendar year in excess of 20% of the holder’s expected income for that calendar year determined in accordance with the Income Tax Act, other than any amount withdrawn in the calendar year under this paragraph or under paragraph 38(1)(e), 39(1)(f) or 41(1)(k), and
        • (II) a physician certifies that the medical or disability-related treatment or adaptive technology is required, or
      • (B) the holder’s expected income for the calendar year determined in accordance with the Income Tax Act – other than any amount withdrawn under this paragraph or paragraph 38(1)(e), 39(1)(f) or 41(1)(k) within the last 30 days before the day on which the certification is made— is less than three quarters of the Year’s Maximum Pensionable Earnings, and
    • (iii) if the holder gives a copy of Form 1 and Form 2 of the schedule to the financial institution with whom the contract or arrangement for the restricted life income fund was entered into; and
  • (l) provides that, if the restricted life income fund is established in the calendar year in which the holder of the fund reaches 55 years of age or in any subsequent calendar year, the holder of the fund may transfer 50% of the funds in that fund to a registered retirement savings plan or a registered retirement income fund within 60 days after the day on which the restricted life income fund is established if

    • (i) the restricted life income fund was created as the result of the transfer, a transfer under the Pension Benefits Standard Act, 1985, a transfer from another PRPP or a transfer from a locked-in RRSP or a life income fund, and
    • (ii) the holder gives a copy of Form 2 of the schedule to the financial institution with whom the contract or arrangement for the restricted life income fund was entered into.

Lump sum

(2) The restricted life income fund may provide that, if a physician certifies that owing to mental or physical disability the life expectancy of the holder of the fund is likely to be shortened considerably, the funds in that fund may be paid to the holder in a lump sum.

Prescribed life income fund

41. (1) For the purposes of paragraphs 50(1)(b), 50(3)(b), 53(4)(b), and 54(2)(b) of the Act the funds in the member’s account may be transferred to a life income fund that

  • (a) sets out the method of determining the value of the life income fund, including the valuation method used to establish its value on death or on a transfer of assets;

  • (b) provides that the holder of the life income fund shall, at the beginning of each calendar year or at any other time agreed on by the financial institution with whom the contract or arrangement was entered into, decide the amount to be paid out of the life income fund in that year;

  • (c) provides that in the event that the holder of the life income fund does not notify the financial institution with whom the contract or arrangement for the life income fund was entered into of the amount to be paid out of the life income fund in a calendar year, the minimum amount determined in accordance with the Income Tax Act shall be paid out of the life income fund in that year;

  • (d) provides that, for any calendar year before the calendar year in which the holder of the life income fund reaches 90 years of age, the amount of income paid out of the life income fund shall not exceed the amount determined by the following formula

A × B

where

A is, for the first calendar year, the balance in the member’s account at the date when the initial amount was transferred into the life income fund and, for every subsequent calendar year, the balance at the beginning of the calendar year, and

B is

  • (a) for each of the first 15 years, less than or equal to the monthly average yield on Government of Canada marketable bonds of maturity over 10 years, as published by the Bank of Canada, for the month of November before the beginning of each calendar year, and

  • (b) for any subsequent year, not more than 6%;

  • (e) provides that, for the calendar year in which the contract or arrangement was entered into, the amount determined under paragraph (d) shall be multiplied by the number of months remaining in that year and then divided by 12, with any part of an incomplete month counting as one month;

    (f) provides that if, at the time the life income fund was established, part of the life income fund was composed of funds that had been held in another life income fund of the holder earlier in the calendar year in which the fund was established, the amount determined under paragraph (d) is deemed to be zero in respect of that part of the life income fund for that calendar year;

  • (g) provides that the funds in the life income fund may only be

    • (i) transferred to another life income fund or to a restricted life income fund,
    • (ii) transferred to a locked-in RRSP, or
    • (iii) used to purchase an immediate life annuity or a deferred life annuity;
  • (h) provides that, on the death of the holder of the life income fund, the funds in the life income fund shall be paid to the survivor of the holder by

    • (i) transferring the funds to another life income fund or to a restricted life income fund,
    • (ii) using the funds to purchase an immediate life annuity or a deferred life annuity, or
    • (iii) transferring the funds to a locked-in RRSP;

  • (i) provides that, subject to subsection 53(3) of the Act, the funds or any interest or right in those funds, shall not be transferred, charged, attached, anticipated or given as security and that any transaction appearing to do so is void or, in Quebec, null;

  • (j) provides that, in the calendar year in which the holder of the life income fund reaches 55 years of age or in any subsequent calendar year, the funds may be paid to the holder in a lump sum if

    • (i) the holder certifies that the total value of all assets in all locked-in RRSPs, life income funds, restricted locked-in savings plans and restricted life income funds that were created as a result of the transfer a transfer under the Pension Benefits Standard Act, 1985 or a transfer from another PRPP, is less than or equal to 50% of the Year’s Maximum Pensionable Earnings and
    • (ii) the holder gives a copy of Form 2 and Form 3 of the schedule to the financial institution with whom the contract or arrangement for the life income fund was entered into; and
  • (k) provides that the holder of the life income fund may withdraw an amount from that fund up to the lesser of the amount determined by the formula set out in subsection 38(2) and 50% of the Year’s Maximum Pensionable Earnings minus any amount withdrawn in the calendar year under this paragraph or under paragraph 38(1)(e), 39(1)(f) or 40(1)(k)

    • (i) if the holder certifies that they have not made a withdrawal in the calendar year under this paragraph or under paragraph 38(1)(e), 39(1)(f) or 40(1)(k) other than within the last 30 days before the day on which the certification is made,
    • (ii) if,

      • (A) in the event that the value of M in subsection 38(2) is greater than zero,

        • (I) the holder certifies that they expect to make expenditures on medical or disability-related treatment or adaptive technology during the calendar year in excess of 20% of the holder’s expected income for that calendar year determined in accordance with the Income Tax Act, other than the amount of any withdrawals in the calendar year under this paragraph or under paragraph 38(1)(e), 39(1)(f) or 40(1)(k), and
        • (II) a physician certifies that the medical or disability-related treatment or adaptive technology is required, or
      • (B) the holder’s expected income for the calendar year determined in accordance with the Income Tax Act –– other than the amount of any withdrawal under this paragraph or paragraph 38(1)(e), 39(1)(f) or 40(1)(k) within the last 30 days before the day on which the certification is made — is less than three quarters of the Year’s Maximum Pensionable Earnings, and
    • (iii) if the holder gives a copy of Form 1 and Form 2 of the schedule to the financial institution with whom the contract or arrangement for the life income fund was entered into.

Lump sum

(2) The life income fund may provide that, if a physician certifies that, owing to mental or physical disability, the life expectancy of the holder of the life income fund is likely to be shortened considerably, the funds in the life income fund may be paid to the holder in a lump sum.

Prescribed life annuity

42. (1) For the purposes of paragraphs 50(1)(c), 50(3)(c), 53(4)(c) and 54(2)(c) of the Act, the funds in a member’s account may be used to purchase

  • (a) an immediate life annuity that provides that

    • (i) except as provided in subsection 53(3) of the Act, no benefit provided under the annuity shall be transferred, charged, attached, anticipated or given as security and that any transaction appearing to do so is void or, in Quebec, null; and
    • (ii) except in the case of the unexpired period of a guaranteed annuity when the annuitant is deceased, no benefit provided under the annuity shall be surrendered or commuted during the lifetime of the annuitant or the spouse or common-law partner of the annuitant and any transaction purporting to surrender or commute such a benefit is void or, in Quebec, null; or
  • (b) a deferred life annuity that provides
    • (i) for that set out in subparagraphs (a)(i) and (ii),
    • (ii) that if the annuitant dies prior to the time that the annuity payments commence, the survivor is entitled, on the death of the annuitant, to an amount equal to the commuted value of the deferred life annuity; and
    • (iii) that any amount to which the survivor is entitled shall be

      • (A) transferred to a locked-in RRSP,
      • (B) transferred to a PRPP,
      • (C) transferred to a pension plan, if the pension plan permits such a transfer and administers the benefit attributed to the transferred funds as if the benefit were that of a plan member,
      • (D) used to purchase an immediate life annuity or a deferred life annuity, or
      • (E) transferred to a life income fund or to a restricted life income fund.

Commuted value of deferred life annuity

(2) For the purposes of subsection (1), the commuted value of the deferred life annuity shall be determined in accordance with the Recommendations for the Computation of Transfer Values from Registered Pension Plans issued by the Canadian Institute of Actuaries, as amended from time to time.

ELECTRONIC COMMUNICATIONS

Consent

43. (1) For the purposes of paragraph 64(1)(a) of the Act, the addressee must consent orally, in writing or electronic form.

Requirements — administrator

(2) Before an addressee consents, the administrator must notify the addressee

  • (a) of the addressee’s right to revoke their consent at any time;

  • (b) of the addressee’s responsibility to inform the administrator of any changes the addressee makes to the designated information system including any changes made to the contact information for the designated information system; and

  • (c) of the date when the consent takes effect.

Revocation

(3) Any revocation of consent must be done orally, in writing or in electronic form.

Notice

44. If an electronic document is provided on a generally accessible information system, such as a website, the administrator must provide to the member a notice, in writing or in electronic form, of the availability and location of the electronic document.

Document considered provided

45. An electronic document is considered to have been provided to an addressee when it enters into or is made available on the information system designated by the addressee.

Believed not to be received

46. (1) If an administrator has reason to believe that an addressee has not received an electronic document or the notice required under section 44, the administrator must mail a paper copy of the document to the addressee.

No effect — electronic document reception

(2) The mailing of a paper copy does not affect when the electronic document is considered to have been provided under section 45.

OBJECTIONS AND APPEALS

Notice of objection

47. An administrator must sign and send two copies of the notice of objection referred to in subsection 37(1) of the Act by registered mail.

Notice of appeal

48. A notice of appeal referred to in subsection 38(2) of the Act must be in the form referred to in section 337 of the Federal Courts Rules.

TERMINATION AND WINDING-UP

Prescribed qualifications — termination report

49. For the purposes of subsection 62(9) of the Act, the termination report shall be prepared by an actuary, a person authorized to act as an accountant under the laws of a province or other professional advisor.

10. The Regulations are amended by adding, after section 49, the schedule set out in the schedule to these Regulations.

COMING INTO FORCE

Registration

11. These Regulations come into force on the day on which the Pooled Registered Pensions Plans Act, chapter 16 of the Statutes of Canada, 2012, comes into force.

SCHEDULE
(Section 10)

SCHEDULE
(Sections 38 to 41 )

FORM 1

CERTIFICATION REGARDING WITHDRAWAL BASED ON FINANCIAL HARDSHIP

1. To: (insert name of financial institution) ________________________________

2. List of applicable locked-in plans: (Please identify any locked-in registered retirement savings plan, life income fund, restricted locked-in savings plan or restricted life income fund that is held by the financial institution identified above and from which you intend to withdraw or transfer funds.)

  • (a) ___________________________________________

  • (b) ___________________________________________

  • (c) ___________________________________________

3. Certification

I, (insert name) ___________________________________,

of (insert address) ___________________________________________,

in the city of ____________________________, in the province of , certify the following:

I own the plan(s) identified in item 2. On the day on which I sign this certification (choose all that apply):

(A) Withdrawal for expenditures on medical or disability-related treatment or adaptive technology

(a) ____________

My total expected income for the calendar year, determined in accordance with the Income Tax Act (excluding the withdrawal referred to in line G below and any withdrawal made under paragraph 38(1)(e), 39(1)(f), 40(1)(k) or 41(1)(k) of the Pooled Registered Pension Plan Regulations within the last 30 days before this application) is $______________________.

(b) ____________

I submit a letter signed by a physician certifying that medical or disability-related treatment or adaptive technology is required.

(c) ____________

I expect to make expenditures on the medical or disability-related treatment or adaptive technology specified in the physician’s certificate in the amount of $_____________________, which is greater than 20% of my total expected income for the calendar year.

(d) ____________

I have not made any other withdrawal, other than within the last 30 days before this application, during the calendar year under paragraph 38(1)(e), 39(1)(f), 40(1)(k) or 41(1)(k) of the Pooled Registered Pension Plan Regulations.

(B) Withdrawal based on low income

____________

My total expected income for the calendar year, determined in accordance with the Income Tax Act (excluding the withdrawal referred to in line G below and any withdrawal made under paragraph 38(1)(e), 39(1)(f), 40(1)(k) or 41(1)(k) of the Pooled Registered Pension Plan Regulations within the last 30 days before this application) is less than three quarters of the Year’s Maximum Pensionable Earnings as defined in the Pooled Registered Pension Plan Act.

4. Amount Sought for Withdrawal

A

Expected income in this calendar year determined in accordance with the Income Tax Act.

$_______

   

B

Total financial hardship withdrawals made during the calendar year from all federally regulated locked-in registered retirement savings plans, life income funds, restricted life income funds and restricted locked-in savings plans.

$_______

   

B(i): total low income component
of B is

$_______

   

B(ii): total medical and disability-related income component of B is

$_______

   

C

50% of the Year’s Maximum Pensionable Earnings as defined in the Pooled Registered Pension Plans Act.

$_______

   

CALCULATION OF LOW INCOME COMPONENT OF WITHDRAWAL
(To be completed only if seeking withdrawal under this component.)

D

Low income withdrawal component.

   

$_______

Enter amount from D(iv) if greater than zero otherwise enter “0”

D(i)

A - B

$_______

 

D(ii)

66.6% of D(i)

$_______

 

D(iii)

C - D(ii)

$_______

 

D(iv)

D(iii) - B(i)

$_______

 

CALCULATION OF MEDICAL AND DISABILITY-RELATED COMPONENT OF WITHDRAWAL
(To be completed only if seeking withdrawal under this component.)

E

Total expected medical and disability-related expenditures for which withdrawal is being sought.

Enter amount from E(v)

     $_______

E(i) Total expected medical and disability-related expenditures in the calendar year, that a medical doctor certifies are required.

 

$_______

 

E(ii)

A - B

$_______

 

E(iii)

20% of E(ii)

$_______

 

E(iv)

If E(i) is greater than or equal to E(iii) enter E(i) otherwise enter “0”

$_______

 

E(v)

Enter the lesser of E(iv) and C

$_______

 

CALCULATION OF FINANCIAL HARDSHIP WITHDRAWAL

F

Total amount eligible for financial hardship withdrawal.

     

Enter amount from F(iii)

   

$_______

F(i)

D + E

$_______

 

F(ii)

C - B

$_______

 

F(iii)

Enter lesser of F(i) and F(ii)

$_______

 

G

Total amount applicant wishes to withdraw.

Enter F or a lesser amount

     $_______

5. Signatures

Sworn before me, on the ________________________ day of

_________________________, 20 _________

at _________________________, in the province of

___________________________.

Signature of applicant _______________________

______________________________

A person authorized to take affidavits

FORM 2

CERTIFICATION(S) REGARDING SPOUSE/COMMON-LAW PARTNER

1. To: (insert name of financial institution) __________________________________

2. List of applicable locked-in plans: (Please identify any locked-in registered retirement savings plan, life income fund, restricted locked-in savings plan or restricted life income fund that is held by the financial institution identified above and from which you intend to withdraw or transfer funds.)

  • (a) ___________________________________________

  • (b) ___________________________________________

  • (c) ___________________________________________

3. Certification of applicant

I, (insert name) _________________________, of (insert address)

_____________________________________________________,

in the city of ____________________________, in the province

of____________________________, certify the following:

I own the locked-in plan(s) identified in item 2. I intend to withdraw or transfer

$_______________________ from the plan(s). On the day on which I sign this

certification (check one):

(a) ____________

I do not have a spouse or common-law partner, as defined in subsection 2(1) of the Pooled Registered Pension Plans Act;

(b) ____________

I have a spouse or common-law partner, as defined in section 2(1) of the Pooled Registered Pension Plans Act and my spouse or common-law partner consents to the withdrawal of the amount specified above from the locked-in plan(s) identified in item 2. (If you check this box, your spouse or common-law partner must complete the Certification of Spouse or Common-law Partner, in item 6 below.)

4. Acknowledgements

I understand that when funds are withdrawn or transferred from any locked-in plan, the funds may lose the creditor protection provided by the Pension Benefits Standards Act, 1985 and the Pension Benefits Standards Regulations, 1985.

I understand that when funds are withdrawn or transferred from any locked-in plan, the funds may be taxable under the Income Tax Act or other legislation.

I understand that I may need to seek professional advice about the financial and legal implications of such a withdrawal or transfer.

5. Signatures

Sworn before me, on the ________________________ day of

_________________________, 20 _________

at _________________________, in the province of

___________________________.

Signature of applicant ___________________________

______________________________

A person authorized to take affidavits

6. Certification of Spouse or Common-law Partner

I, (insert name) _________________________, of (insert address)

_____________________________________________________,

in the city of ____________________________, in the province of

____________________________, certify the following:

I am the spouse or common-law partner of the owner of the locked-in plan(s) identified in item 2.

I understand that

  • (a) the applicant intends to withdraw or transfer funds from the locked-in plans identified in item 2, which withdrawal or transfer is not permitted under the Pooled Registered Pension Plans Act unless the applicant obtains my consent;

  • (b) as long as these funds are kept in that locked-in plan, I may have a right to a share of these funds if there is a breakdown in our relationship or if the owner dies;

  • (c) if any funds are withdrawn or transferred from that locked-in plan, I may lose any right that I have to a share of the funds withdrawn or transferred;

  • (d) when funds are withdrawn or transferred from any locked-in plan the funds may lose the creditor protection provided by the Pension Benefits Standards Act, 1985 and the Pension Benefits Standards Regulations, 1985;

  • (e) when funds are withdrawn or transferred from any locked-in plan the funds may be taxable under the Income Tax Act or other legislation; and

  • (f) I may need to seek professional advice about the financial and legal implications of such a withdrawal or transfer.

7. Consent of Spouse or Common-law Partner

I consent to the withdrawal or transfer specified in item 3.

8. Signatures

Sworn before me, on the ________________________ day of

_________________________, 20 _________

at _________________________, in the province of

___________________________.

Signature of spouse or common-law partner __________________________

______________________________

A person authorized to take affidavits

FORM 3

CERTIFICATION OF TOTAL AMOUNT HELD IN LOCKED-IN PLANS

1. To: (insert name of financial institution) ___________________________________

2. List of applicable locked-in plans: (Please identify all locked-in registered retirement savings plan, life income fund, restricted locked-in savings plan or restricted life income fund which you own including any that are held by financial institutions other than the one identified above.)

  • (a) ___________________________________________

  • (b) ___________________________________________

  • (c) ___________________________________________

3. Certification

I, (insert name) _________________________, of (insert address)

_____________________________________________________,

in the city of ____________________________, in the province

of ____________________, certify the following:

I own the locked-in plans identified in item 2. On the day on which I sign this certification the total value of all of the locked-in plan(s) identified in item 2 is $ ________________________.

On the day on which I sign this certification the total value of all of the locked-in plan(s) identified in item 2 is $ _________________.

The total value of all locked-in plan(s) identified in item 2 is less than 50% of the Year’s Maximum Pensionable Earnings as defined in the Pooled Registered Pension Plans Act.

4. Signatures

Sworn before me, on the ________________________ day of

_________________________, 20 _________

at _________________________, in the province of

___________________________.

Signature of applicant ________________________

______________________________

A person authorized to take affidavits

Footnote a
S.C. 2012, c. 16

Footnote 1
SOR/2012-222