Pooled Registered Pension Plans Regulations (SOR/2012-294)

Permitted Inducements

Marginal note:Permitted inducements

19 An administrator may give, offer or agree to give or offer to an employer and an employer may demand, accept or offer or agree to accept from an administrator, as an inducement to enter into a contract with the administrator in respect of a PRPP

• (a) a product or a service on more favourable terms or conditions than the administrator would otherwise offer if the inducement is for the equal benefit of the employees of that employer who are eligible to be members of the PRPP; or

• (b) in relation to a transfer of assets into the PRPP administered by the administrator, an amount no greater than the employer’s costs associated with the transfer of assets into that PRPP.

Low-Cost Plan

Marginal note:Criteria

20 The following criteria must be used to determine whether a PRPP is being provided to its members at low cost:

• (a) costs are to be at or below those incurred by members of defined contribution plans that provide investment options to groups of 500 or more members; and

• (b) costs are to be the same for all members of a PRPP.

0% Contribution Rate

Marginal note:Condition

• 21 (1) A member may set a contribution rate of 0% if 12 months have elapsed since the member’s contributions to the PRPP began.

• Marginal note:Duration

  (2) The rate may be set at 0% for a period of 3 to 60 months. There is no limit on the number of times that the rate may be set at 0%.

• Marginal note:Contents of notice

  (3) The notice to be provided to the administrator under subsection 45(2) of the Act must be in writing and include

  • (a) the member’s name and contact information and the name of the member’s employer; and

  • (b) the period for which the contribution rate is to be set at 0%.

• Marginal note:Duties of administrator

  (4) The administrator must

  • (a) no more than 60 days after the day on which the administrator is notified under subsection 45(2) of the Act

    • (i) provide the member with written confirmation of when the contribution rate will be set at 0% and when contributions will resume, and

    • (ii) ensure that the member’s contribution rate is set at 0%; and

  • (b) no fewer than 90 days before the day on which contributions are to resume, provide the member with written notice of the day of resumption and the contribution rate on resumption.

General Requirements

Marginal note:Advance notice to employees

22 The notice required under subsection 41(1) of the Act must include the expected effective date of the contract and

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

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

• (c) 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

• (d) 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.

Marginal note: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 29 and include a form that would meet those requirements if completed by the employee;

• (b) indicate that, if an administrator offers investment options and a member has not communicated an investment choice within 60 days after receiving the notice, the default option will apply;

• (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 it,

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

  • (iv) its performance history,

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

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

  • (vii) the cost associated with 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 employer’s contribution rate;

• (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 and other charges that would be triggered by a member’s actions;

• (k) list any other costs, expressed as a percentage or a fixed amount;

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

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

• (n) explain an employee’s right to opt back into the PRPP; and

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

Marginal note: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 on a website and, on request, directly to the member.

Marginal note: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 and other charges that would be triggered by the member’s actions;

• (b) that each member shall, if the PRPP provides for variable payments, be given a statement no more than 18 months before and no fewer than 6 months before the day on which the member reaches 55 years of age, that indicates

  • (i) the member’s right to elect to receive variable payments starting at 55 years of age, 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 and other charges incurred.

Marginal note:Prescribed information — written statement

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

• (a) the member’s investment option;

• (b) for the year, the opening balance, any contributions, the change in the investments’ value — 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 date the variable payment began to be paid,

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

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

  • (v) the payment frequency over the year,

  • (vi) 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

  • (vii) a list of the transfer options available under subsection 50(1) of the Act;

• (d) a summary of any transactions in 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 that 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 the investment option’s past performance is not necessarily an indication of its future performance;

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

• (j) any fees, levies and other charges triggered by the member’s actions;

• (k) the member’s and employer’s contributions; and

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

Marginal note:Information return — prescribed information

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

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

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

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

• (d) a list of any fees, levies and other charges triggered by a member’s actions;

• (e) a statement of the PRPP’s total assets 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 PRPP’s assets; and

• (k) a certificate of the administrator or of any person who prepared, compiled or filed any information on their behalf that certifies that the information provided to the Superintendent is accurate.

Marginal note:Notice — termination by employer

28 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.

Marginal note:Notice — termination by employee

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

• (a) the date of the notice 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.

Marginal note:Statement on termination or death

30 For the purposes of paragraphs 57(1)(d) and (e) of the Act, the statement must provide

• (a) for the current year, the opening balance, the contributions, the change in the investments’ value — 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 change;

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

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

Remittances

Marginal note:Employee contributions

31 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.