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A divestment is the transfer of an operation and its employees from the Ontario
Public Service or one of its agencies to other governments, agencies or the
private sector. The sale or assignment of an operation from one employer to
another can have a different impact on members’ pensions, depending on the
circumstances.
The PBA contains provisions concerning divestments to
protect members’ accrued pension benefits. If the new employer provides a
registered pension plan, the PBA imposes certain obligations on both the OPSEU
Pension Trust and the new employer’s pension administrator. These obligations
provide members who are affected by the divestment with special rights and
entitlements. The provisions may also place restrictions on the termination
options available in a divestment situation.
Divestment provisions apply in situations where:
- the employer sells, assigns or otherwise disposes of all or part of its
business or all or part of the assets or services of its business to a new
employer, and
- the affected individual becomes employed by the new employer in conjunction
with the transfer of the employer’s business, assets or services, and
- the new employer provides a registered pension plan for its employees, and
- the affected individual becomes a member of the pension plan provided by the
new employer.
Revised August 2009
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