8506 (1) For the purposes of paragraph 8502(c), the following benefits may, subject to the conditions specified in respect of each benefit, be provided under a money purchase provision of a pension plan:
Lifetime Retirement Benefits
(a) lifetime retirement benefits provided to a member where the benefits are payable in equal periodic amounts or are not so payable only by reason that
(i) the benefits payable to a member after the death of the member’s spouse or common-law partner are less than the benefits that would be payable to the member were the member’s spouse or common-law partner alive, or
(ii) the benefits are adjusted, after they commence to be paid, where
(A) in the case of retirement benefits provided in accordance with subparagraph (2)(g)(i), the adjustments would be in accordance with any of subparagraphs 146(3)(b)(iii) to (v) of the Act if the annuity by means of which the lifetime retirement benefits are provided were an annuity under a retirement savings plan, and
(B) in any other case, the adjustments are acceptable to the Minister and are similar in nature to adjustments that are permissible under clause (A);
Bridging Benefits
(b) bridging benefits provided to a member where the bridging benefits are payable for a period ending no later than the end of the month following the month in which the member attains 65 years of age;
Guarantee Period
(c) retirement benefits (in this paragraph referred to as “continued retirement benefits”) provided to one or more beneficiaries of a member who dies after retirement benefits under the provision commence to be paid to the member where
(i) the continued retirement benefits are payable for a period beginning after the death of the member and ending no later than 15 years after the day on which retirement benefits commence to be paid under the provision to the member, and
(ii) the aggregate amount of continued retirement benefits payable under the provision for each month does not exceed the amount of retirement benefits that would have been payable under the provision for the month to the member if the member were alive;
Post-retirement Survivor Benefits
[- [NOTE: Application provisions are not included in the consolidated text
- see relevant amending Acts and regulations.] [SOR/2001-188, s. 17(E)]
(d) retirement benefits (in this paragraph referred to as “survivor retirement benefits”) provided to a beneficiary of a member who dies after retirement benefits under the provision commence to be paid to the member where
(i) the beneficiary is a spouse or common-law partner or former spouse or common-law partner of the member at the time the member’s retirement benefits commence to be paid,
(ii) the survivor retirement benefits are payable for a period beginning after the death of the member and ending with the death of the beneficiary, and
(iii) the aggregate amount of survivor retirement benefits and other retirement benefits payable under the provision for each month to beneficiaries of the member does not exceed the amount of retirement benefits that would have been payable under the provision for the month to the member if the member were alive;
Pre-retirement Survivor Benefits
[- [NOTE: Application provisions are not included in the consolidated text
- see relevant amending Acts and regulations.] [SOR/2001-188, s. 17(E)]
(e) retirement benefits provided to a beneficiary of a member who dies before retirement benefits under the provision commence to be paid to the member, and benefits provided to other individuals after the death of the beneficiary, where
(i) the beneficiary is a spouse or common-law partner or former spouse or common-law partner of the member at the time of the member’s death,
(ii) the benefits would be permissible under paragraphs (a) to (c) if the beneficiary were a member of the plan, and
(iii) the retirement benefits are payable to the beneficiary beginning no later than on the later of one year after the day of death of the member and the end of the calendar year in which the beneficiary attains 69 years of age;
Payment from Account
(f) the payment with respect to a member of a single amount from the member’s account under the provision;
Lump Sum Payments on Death Before Retirement
(g) the payment of one or more single amounts to one or more beneficiaries of a member who dies before retirement benefits under the provision commence to be paid to the member;
Commutation of Benefits
(h) the payment with respect to a member of a single amount in full or partial satisfaction of the member’s entitlement to other benefits under the provision, where the single amount does not exceed the present value (at the time the single amount is paid) of the other benefits that, as a consequence of the payment, cease to be provided; and
(i) the payment, with respect to an individual after the death of a member, of a single amount in full or partial satisfaction of the individual’s entitlement to other benefits under the provision, where the individual is a beneficiary of the member and the single amount does not exceed the present value (at the time the single amount is paid) of the other benefits that, as a consequence of the payment, cease to be provided.
Additional Conditions
(2) For the purposes of section 8501, the following conditions are applicable in respect of each money purchase provision of a pension plan:
Employer Contributions Acceptable to Minister
(a) the amount of contributions that are to be made under the provision by each employer who participates in the plan is determined in a manner acceptable to the Minister;
Employer Contributions with respect to Particular Members
(b) each contribution that is made under the provision by an employer consists only of amounts each of which is an amount that is paid by the employer with respect to a particular member;
Allocation of Employer Contributions
(b.1) each contribution that is made under the provision by an employer is allocated to the member with respect to whom it is made;
Employer Contributions Not Permitted
(c) contributions are not made under the provision by an employer, and property is not transferred to the provision in respect of the actuarial surplus under a defined benefit provision of the plan or another registered pension plan,
(i) at a time when there is a surplus under the provision, or
(ii) at a time after 1991 when an amount that became a forfeited amount under the provision before 1990, or any earnings of the plan that are reasonably attributable to that amount, is being held in respect of the provision and has not been reallocated to members of the plan;
Return of Contributions
(d) where the plan is not established by an enactment of Canada or a province, it includes a stipulation that permits, for the purpose of avoiding revocation of the registration of the plan, a contribution made under the provision by a member or by an employer to be returned to the person who made the contribution, which stipulation may provide that a return of contributions is subject to the approval of the authority administering the Pension Benefits Standards Act, 1985 or a similar law of a province;
Allocation of Earnings
(e) the earnings of the plan, to the extent that they relate to the provision and are not reasonably attributable to forfeited amounts or a surplus under the provision, are allocated to plan members on a reasonable basis and no less frequently than annually;
Payment or Reallocation of Forfeited Amounts
(f) each forfeited amount under the provision (other than an amount forfeited before 1990) and all earnings of the plan that are reasonably attributable to the forfeited amount are
(i) paid to participating employers,
(ii) reallocated to members of the plan, or
(iii) paid as or on account of administrative, investment or similar expenses incurred in connection with the plan
on or before December 31 of the year immediately following the calendar year in which the amount is forfeited, or such later time as is permitted by the Minister under subsection (3);
Retirement Benefits
(g) retirement benefits under the provision are provided
(i) by means of annuities that are purchased from a person who is licensed or otherwise authorized under the laws of Canada or a province to carry on in Canada an annuities business, or
(ii) under an arrangement acceptable to the Minister; and
Undue Deferral of Payment
(h) each single amount that is payable after the death of a member is paid as soon as is practicable after the member’s death.
Alternative Method for Allocating Employer Contributions
(2.1) The Minister may, on the written application of the administrator of a pension plan, waive the application of the condition in paragraph (2)(b.1) in respect of a money purchase provision of the plan where contributions made under the provision by an employer are allocated to members of the plan in a manner acceptable to the Minister.
Reallocation of Forfeitures
(3) The Minister may, on the written application of the administrator of a registered pension plan, extend the time for satisfying the requirements of paragraph (2)(f) where
(a) the aggregate of the forfeited amounts that arise in a calendar year is greater than normal because of unusual circumstances; and
(b) the forfeited amounts are to be reallocated on a reasonable basis to a majority of plan members or paid as or on account of administrative, investment or similar expenses incurred in connection with the plan.
- [NOTE: Application provisions are not included in the consolidated text
- see relevant amending Acts and regulations.]
- SOR/92-51, s. 7
- SOR/95-64, s. 13
- SOR/99-9, s. 23
- SOR/2001-188, ss. 14, 15
- Date modified: