Quebec has become the first Canadian province to establish a regulatory framework for dynamic pension funds, officially adopting regulations on December 17 that will allow defined contribution pension plans and voluntary retirement savings plans to offer variable payment life annuities starting January 1, 2026, according to a press release from Normandin Beaudry.
The regulations, published in draft form in May 2025, were adopted with minimal changes and will enable plan members to convert retirement savings into lifetime income that adjusts based on investment returns and mortality experience.
How dynamic pension funds work
Members can transfer all or part of their savings into a dynamic pension fund, which immediately converts the amount into lifetime income based on a reference interest rate and mortality assumptions.
Pensions will be adjusted annually according to the fund’s investment returns, calculated using audited financial reports. Adjustments for mortality experience of beneficiaries must occur at least every three years, or when mortality assumptions change.
Regulatory requirements
Dynamic pension funds must undergo actuarial valuation at least every three years and maintain a minimum of ten beneficiaries receiving lifetime pensions.
Retraite Québec has published information about dynamic pension funds on its website and will host a webinar on the topic in March 2026.
The new option provides an alternative to traditional annuities for Quebecers converting retirement savings into income, with availability expected as early as 2026 for eligible workplace pension plans.
