Voluntary Retirement Savings Plans (VRSPs) and your business!

May 12, 2014

On December 3, 2013, the National Assembly of Quebec passed Bill 39 creating a new retirement savings product: the Voluntary Retirement Savings Plan (VRSP). With automatic enrolment of eligible employees, automatic contribution increases, and other key features, VRSPs will give thousands of workers the opportunity to save for their retirement in a group setting - some for the first time!

The new law, which takes effect on July 1, 2014, makes it mandatory for Quebec employers with five or more eligible employees to offer a VRSP to employees who do not currently have the opportunity to contribute to a workplace savings plan.

How the VRSP may affect your business
Under the new law, Quebec employers who have five or more employees who meet the eligibility criteria and who do not already offer a workplace savings plan - defined as a registered retirement savings plan; or a tax-free savings account through payroll deductions; or a registered pension plan - must offer a VRSP to their eligible employees. The deadline to put into place a VRSP depends on the number of eligible employees as follows:

  • December 31, 2016 - for employers with 20 or more employees on June 30, 2016.
  • December 31, 2017 - for employers with 10 to 19 employees on June 30, 2017.
  • On a date set by the government, but not prior to January 1, 2018 - for employers with five to nine employees.

If you have five or more eligible employees, you will need to consider whether all of your eligible employees already have access to a workplace savings plan you offer. If they do not have access to an existing plan, you will need to either a) offer a VRSP to these employees or b) redefine the eligibility requirements for your existing plan so that all eligible employees can participate.

VRSP - Key Roles and Responsibilities of an Employer
For an employer who chooses to implement the VRSP, Sun Life Financial will be here to provide support and answer questions at every step along the process. Below is a quick look at the key roles and responsibilities of an employer when implementing a VRSP:

  • Choose your VRSP administrator (Sun Life Financial submitted an application to be an authorized VRSP administrator). 
  • Notify employees in writing of your intention to offer a plan at least 30 days before signing a contract with a VRSP administrator.  
  • Enrol all eligible employees in the plan.
  • Notify plan administrator of employees wishing to opt out. While eligible employees will be automatically enrolled in the plan chosen by their employer, they can opt out within 60 days of the notice of membership being sent to them. The employer must notify the plan administrator and retain the opt-out notice for the duration of the employee’s employment.
  • Remit employee contributions to the plan administrator.
  • Notify plan administrator of a member’s termination of employment within 30 days after the date of termination.

The above is a summary of key employer responsibilities and does not constitute a comprehensive list. For full details about your role as employer, employee eligibility and for more information on the VRSP, visit the Régie des rentes Quebec website: http://www.rrq.gouv.qc.ca/en/travail/participer_rver/Pages/participer_rver.aspx.

Please contact your Sun Life Financial Group Retirement Services representative.

This article has been published to keep you informed of the latest news regarding the VRSP. Before Sun Life or any provider can offer you a VRSP, the regulations governing the VRSP must be final and all regulatory approvals regarding licencing and the registration of the plan must be obtained from the regulatory authorities. Stay tuned for updates and the launch of Sun Life Financial’s VRSP.