Employees who leave the construction industry before becoming eligible for a pension and have no hours worked credited to their pension record in the 24 months immediately preceding their application have two choices.
They may keep their benefits in the pension plan and wait until they reach the age at which they become eligible for a pension. The portion of the pension that will come from the general account, if applicable, will be enhanced by a 12.5% supplement.
They may choose to receive a benefit upon termination of plan membership. They will then receive, in a single payment :
- The value of their accrued benefits in the general account, if applicable, paid out according to the plan’s solvency ratio*, without exceeding 100%, plus
- 100% of the value of their accrued benefits in the complementary account, if applicable.
What must an employee do to receive a benefit upon termination of plan membership?
The CCQ does not automatically send a form to employees. Employees must contact the CCQ Customer Services to apply for termination of plan membership.
They must return the Option Form duly filled out and accompanied by the documents required before the deadline; the form is valid for 60 days from the date of the application. If an employee does not return the form before the deadline, he or she must apply again in order to receive a pension from the plan. The options may then be different and the amounts calculated may be higher or lower than those indicated on the first form.
Depending on the amount, the benefit upon termination of plan membership may have to be transferred to a locked-in retirement savings vehicle such as:
No taxes would be deducted on the transferred amount.
If the total value of the benefits, is below 20% of the maximum pensionable earnings (MPE) established under the Act Respecting the Québec Pension Plan, employees may choose to:
- Be paid by cheque minus tax deductions;
However, no matter the amount of the benefit upon termination of plan membership, the portion that comes from the general account, if applicable, is limited to a maximum transferable value under the Federal Income Tax Act. If there is an excess amount, it must be paid to the employee by cheque, with taxes deducted at source.
Disability or reduced life expectancy
Employees who have a total, permanent disability or whose life expectancy is less than two years may obtain, under certain conditions, a plan membership termination benefit even if they have had hours worked credited within the previous 24 months. In these two situations, the portion of the benefit from the general account for hours worked before 2005, if applicable, is paid 100% without regard for the plan’s solvency ratio*. The benefits from the complementary account, if applicable, are also paid 100%.
In the case of reduced life expectancy, the benefit is not locked in – that is, employees may choose to receive a cheque made payable to them, with tax deductions withheld, or transfer the benefit upon termination of plan membership to an RRSP without tax deductions. In the case of total permanent disability, the above payment terms apply.
Interest is calculated between the date of the application and the date of final payment. If the interest is positive, the amount paid is higher than that given on the Option Form. However, if the interest is negative, the amount paid may be lower.
Special conditions, limitations, or exclusions other than those mentioned above may apply to the payment of certain benefits; only the Règlement sur les régimes complémentaires d'avantages sociaux dans l'industrie de la construction, published by the Éditeur officiel du Québec, has official and legal force.Nevertheless, the provisions that apply to a specific event are those in force at the time of this event.
* The solvency ratio is the measure of the financial capacity of the plan to honour its commitments to participants if the plan had to end on the date of evaluation. In short, this percentage reflects the health of a pension plan at a specific moment. Depending on the returns on investments and the interest rates, this percentage fluctuates from year to year. The solvency ratio used for the purposes of transfer or payment may not exceed 100%.