A company, in most cases, can chose to terminate a pension plan at any time. This is called winding up the pension plan. A pension plan wind-up can happen for a number of different reasons, such as business reorganization or downsizing. Regardless of the reason for terminating the plan, the process of winding up a pension plan is subject to certain requirements under the Pension Benefits Act .
If your pension plan is winding up you will receive a notice from your employer or the administrator of the plan letting you know about the process. Your pension plan administrator must file a wind-up report to the Superintendent of Pensions that includes information such as the assets and liabilities of the pension plan, the benefits under the plan that will be provided to members, former members and others and how they will allocate and distribute the assets and the priorities for payment of benefits. This report is available for viewing and comments for 30 days.
Once the Superintendent approves the report your employer will provide you with a statement of your benefits. Pensions will continue to be paid during this period.
- Will I still get my pension cheque?
Yes, if you are currently receiving a pension cheque, you will continue to receive it.
- What happens to my pension funds when there is a wind-up?
If you are currently receiving a pension, an annuity will be purchased from a financial institution on your behalf and you will receive your pension cheque as you normally would, just from a different source.
If you are a former member who is not currently receiving a pension, once the wind-up is approved by the Superintendent, the administrator of the pension plan will provide you with an option statement and you will choose where to transfer your funds on a locked-in basis.
- Do I lose my pension in a wind-up?
No, pension funds are used to purchase annuities for those currently receiving a pension cheque and pension funds are transferred to a locked-in retirement arrangement for those who would be entitled receive a pension cheque after retirement.