The Quebec government has adopted regulations allowing defined contribution pension plans and voluntary retirement savings plans to offer variable payment life annuities.
The regulatory changes establish the framework under which DC plans and voluntary retirement savings plans may offer the lifetime income option, including conditions related to plan design, valuation and administration. The move follows draft regulations and consultations earlier this year aimed at expanding decumulation options for plan members.
Read: Quebec’s VPLA rollout would benefit from more flexible approach: CIA
Variable payment life annuities are designed to provide retirees with a lifetime income stream that fluctuates based on investment performance and other actuarial factors, without requiring the purchase of an individual annuity. Proponents have said the model can help support retirement income security while offering greater flexibility within capital accumulation plans.
Quebec is among the first Canadian jurisdictions to adopt a comprehensive regulatory framework permitting VPLAs in both DC plans and voluntary retirement savings plans.