Everyone deserves a better retirement…the sequel!

A year ago, a new retirement savings plan made its appearance on the Québec savings scene. I tackled the voluntary retirement savings plan (VRSP) in my blog last year, in my post Parce que tout le monde a droit à une meilleure retraite (Everyone deserves a better retirement; French only).

Reminders…

Do you remember why the VRSP was created? More than two million Québec workers did not have access to a retirement savings plan at work. Those workers had to be extremely disciplined to set money aside for retirement, so the arrival of the VRSP was good news! But employers have an essential role to play in starting VRSPs off on the right foot.

The goal of the new savings plan is to allow all Québec workers to start saving early, for a more comfortable retirement. Your financial security in retirement depends on smart savings!

Are you an employer?

You should know that YOU can make a difference for your employees’ retirement by instituting a VRSP before the deadlines prescribed by law. Why should you offer a VRSP when the deadline isn’t until December 2016? Okay, okay, in the short term, there’s no legal reason to get a move on.  

But perhaps the question you should ask yourself is why wait until the last minute and be forced to make a hasty decision? Eventually, you’ll have to choose a plan anyway. Finding a plan that fits your business is something that you shouldn’t take lightly. Even if VRSPs are easy to implement, you will have to choose a financial institution (French only) to work with.

Examples

We were recently informed in an article (French only) that the 4 800 members of the Association des restaurateurs du Québec (ARQ) would offer a VRSP to employers and employees in the restaurant business. For the ARQ, the implementation of a VRSP will make recruiting and the holding on to quality employees easier. That’s an initiative that should be highlighted!

Make no mistake, the ARQ is not the only one on board! More than 1 100 other businesses chose to offer a VRSP before the deadlines. To date, more than 6 000 employees put aside a small portion of earnings each payday for their retirement. The savings add up to more than 2 million dollars in assets to date.

All the pertinent information and several tools on voluntary retirement savings plans can be found here. Find out more and pass the word!

A history of family benefits in Québec

For 10 years now, the Régie des rentes du Québec has administered the child assistance program, which provides financial assistance to Québec families.

Are you surprised to hear that? Last year, the Régie paid some 2,2 billion $ to nearly 862 000 families. Parents who care for a handicapped child are also entitled to the supplement for handicapped children. 

 

When poring through our archives, I found a press release announcing the first child assistance payment. In it, the late Claude Béchard, who was the Minister of Employment, Social Solidarity and Family Welfare at the time, celebrated the fact that the Québec government continued to make families one of its main priorities.  

 

Ten years later, child assistance continues to be paid. But did you know that the Régie has also administered family allowances in Québec since 1971? I’ve drawn on Statistiques2013 — Soutien aux enfants (child assistance statistics for 2013; French only) to take you on a quick trip back in time.

1961-1973 – School allowance

In September 1961, the government paid the first benefits to parents: the school allowance. Totalling 10 $ a month, the allowance was paid for teenagers aged 16 and 17 who were attending school and who lived in Québec. It complemented the federal family allowance program.

1967-1973 – Family allowance

In April 1967, Québec created its own family allowance program for parents with a dependent child under age 16. Parents were entitled to 30 $ a year for 1 child and up to 283 $ a year for 6 children.  

 1974-1997 – Québec family allowance plan

A new plan took effect in January 1974 to replace the school allowance and the family allowance. Payments were made on a monthly basis to the mother of any unmarried child under age 18. In May 1977, the allowance paid for each child increased by 27% further to the government’s decision to redistribute an amount of 30 million $ raised through a sales tax on children’s clothing.

1980-2004 – Allowance for handicapped children

In January 1980, an allowance for handicapped children was created. The allowance was 60 $ a month.

 1988-1997 – Allowance for newborn children

This allowance was added in May 1988. Better known as the “baby bonus,” it was intended to raise birthrates. It provided a one-time payment of 500 $ on the birth of a family’s first or second child. An allowance of 375 $ was paid 4 times a year following the birth of a third child or of subsequent children, until the age of 2.

 1989-1997 – Allowance for young children

As of January 1989, this new allowance was paid to any child under age 6.

 1997-2004 – Family benefits

In September 1997, the Act respecting family benefits took effect, ending the allowance for newborn children and the allowance for young children. The Act made several notable changes. The new family allowance was mainly for low-income families since families with a family income over 50 000 $ were excluded. In 2004, some 496 000 families were receiving the family allowance.

Since 2005 – Child assistance

The child assistance measure came into effect in January 2005. It has two components: child assistance and the supplement for handicapped children. It replaces and enhances family benefits while covering all families with children under age 18, regardless of their income. In 2007, certain improvements were made to the child assistance program, including the ability to designate a beneficiary other than the mother.  

 All of these measures show just how important families are to Québec. Parents today continue to be covered by quality programs such as the Québec parental insurance plan (QPIP) and the reduced contribution childcare program. The QPIP was even singled out recently as one of the world’s best parental leave programs (article in French only). It’s something we can be proud of!  

 Just a quick note: the Régie has almost finished sending annual notices to all child assistance beneficiaries. Take a few minutes to check the information on your notice. It’s the best way to ensure that you’re receiving your fair share.
 

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Looking back on a successful year!

Today, the Minister responsible for the Régie des rentes du Québec, Mr. Sam Hamad, tabled the Rapport annuel de gestion 2014 (Annual management report for 2014; French only). What is an annual management report? What purpose does it serve? Are we happy with the Régie’s results for 2014? Let me give you the lowdown.

Strategic plan and action plan 

The Plan stratégique 2012-2016 (2012-2016 Strategic plan; French only) outlines the mission, vision and values of the Régie while placing them in context. It also lists the strategic priorities and objectives the Régie intends to achieve by 31 December 2016.

The Régie prepares an action plan at the start of each year that describes exactly how the Régie will meet those objectives.

And the annual management report? That one’s all for you! It assesses the Régie’s performance and results in relation to its strategic plan and action plan.

Got it? Good!

Busy, busy, busy! 

As you may have noticed, the Régie had an eventful year with regard to supplemental pension plans. Need me to jog your memory? First, the Régie advised the government on the rollout of the law reforming municipal plans, while also participating in various forums on pension plans in the university and private sectors.

In addition, the Voluntary Retirement Savings Plans Act came into effect on 1 July 2014, making the Régie responsible for the monitoring of VRSPs. The Régie is also required to inform workers, employers and plan administrators about how the Act applies to them.

The Régie also played a role in creating the new Industrial Alliance Research Chair on the Economics of Demographic Change. Why did we get involved in research, you might be wondering? Because it enables the Régie to put its retirement expertise to good use. This way, everyone can benefit.

In 2014, the Régie also modernized and simplified an annual notice sent to over 870 000 families receiving child assistance. It also developed a new tool, Spotlight on Your Retirement , that gives retirement-age contributors useful information on choosing the best time to apply for their retirement pension. In addition, the Régie convinced over 181 000 clients to sign up for direct deposit. So here’s a big thank you to everyone who did their part for the environment!

And how did the Régie close out such a busy year? By unveiling its new mobile site!

Performance you can count on! 

Not only did the Régie deliver first-rate results and tackle various initiatives, it was still able to fulfill its mission to:

• pay benefits for retirement, disability and death
• provide financial assistance to families with dependent children
• monitor and supervise the management of supplemental pension plans and voluntary retirement savings plans. 

Check out the graphics below for a portrait of the Régie as at 31 December 2014.

I think the Régie can be pretty proud of its results. What do you think?

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