Pension Benefits Act (PBA) Divestment Provisions

Revised: August 2009 Print this page Email the link

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.

When the PBA Divestment Provisions Apply

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.