Planned regulations on pension transfer options for divested membersPosted: July 15, 2011
Toronto (July 15, 2011) - Ontario's Ministry of Finance has recently posted information on the intended content of regulations that may result in a new pension transfer option for some former OPSEU Pension Plan members who were affected by past public sector divestments.
The final regulations are needed before recent changes to Section 80.1 of Ontario's Pension Benefits Act (PBA) can come into effect. These changes will allow OPTrust and other public sector pension plans to establish agreements providing new transfer options for employees who were enrolled in another pension plan as a result of past divestments. Under the new legislation, these agreements could provide eligible former OPTrust members with the option of consolidating their pension entitlements in their current employer's pension plan.
OPTrust is reviewing the proposed content of the regulations and will be providing comments to the Ministry before the regulations are finalized.
Since OPTrust's inception in 1995, a number of former Government of Ontario employees transferred employment to successor employers through a series of divestments. When affected OPTrust members were transferred, they joined their successor employers' pension plans and became contributing members of that plan. However, where these transfers were subject to Section 80 of the Pension Benefits Act, the employment of the transferred employees was deemed not to have terminated for pension purposes. As a result, these former OPTrust members received a special deferred pension entitlement in the OPSEU Pension Plan for their credited service prior to the transfer.
Under the recent amendments to the Pension Benefits Act, affected employees may have the option to consolidate their two separate pension entitlements in their current (successor) employer's pension plan. However, before this can happen:
- the regulations governing such transfers required under Section 80.1 of the PBA must be finalized and proclaimed, and
- the affected pension plans must establish agreements setting out the terms of any such transfer option, in accordance with the regulations and the provisions of each plan.
OPTrust's limited role regarding post-retirement insured benefits
Some members have made inquiries to OPTrust about post-retirement insured benefits. Except for enrolment services provided under contract, OPTrust has no involvement in or responsibility for the sponsorship, funding or administration of employer-provided post-retirement insured benefits programs, including the requirements for eligibility. This responsibility remains with the Ontario Government.
OPTrust will provide an update on our comments on the proposed regulations once they are filed with the Ministry of Finance. More information on the intended content of the regulations and the deadline for interested parties to provide comments is available on the Ministry of Finance's website.
OPTrust will continue to monitor the regulations' progress and provide more information to affected members as details become available. Where transfer agreements are established to provide affected former members the option of consolidating their pension entitlements in their current employer's pension plan, OPTrust will provide eligible individuals with specific information on their pension entitlements and any other factors they should consider in making an informed decision regarding their transfer option.
For more information on divestments and the OPSEU Pension Plan, please see Your Pension and Divestments.
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