ACPM presses Quebec for clarity on variable annuity framework, citing risk of fluctuating payouts to plan members
September 03, 2025
The Association of Canadian Pension Management ("ACPM") has urged the Quebec government to issue guidelines to plan sponsors regarding the communication of potential payment fluctuations, the calculation of pension adjustment, as well as the option of transferring to another variable payment life pensions ("VPLPs"), as the province prepares for the introduction of VPLPs.
In a submission to Retraite Québec on draft regulations respecting supplemental pension plans and voluntary retirement savings plans, ACPM welcomed the flexibility of VPLP funds as an additional tool for plan providers to meet their members’ needs during the decumulation phase but emphasized that the irreversible nature of fund transfers to these funds also requires a clear and unambiguous understanding of potential payment fluctuations.
“The ACPM believes that it would be appropriate to better define the requirements for illustrations to be provided to members. These illustrations should rigorously reflect the expected returns certified by an actuary, as well as the possible fluctuations in pension amounts,” the submission continues.
To get across the message that the number of members’ pensions may fluctuate over time — including downwards — ACPM suggested that Retraite Québec should issue guidelines encouraging the development of at least three distinct illustrations, showing: an average return scenario 1% per year below expectations; an average return scenario in line with expectations; and an average return scenario 1% per year above expectations.
In addition, ACPM also recommended that the Quebec provincial government should:
- Introduce a maximum reference rate to prevent abusive VPLP product design and protect members’ interests;
- Prevent modifications to a VPLP fund’s risk profile during its lifetime, unless members have the option of transferring the value of their pensions to another fund; and
- Allow for transfers out of VPLPs when fundamental characteristics such as fees, risk profile and openness of fund to new members are significantly modified during the fund’s lifetime.
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