New Pension Legislation Amendments

July 2nd, 2010

Changes to pension legislation in Manitoba were announced on March 26, 2010 and came into effect May 31, 2010. The following is a summary of the changes that affect the MEBP Pension Plan:

1) Vesting (Entitlement to Pension)

  • If you terminate your employment on or after May 31, 2010, you are now automatically "vested" regardless of the length of service. This means you are entitled to the full value of your accrued pension as per the pension formula. Previously, you required two or more years of qualifying service to be vested.

2) Locking-in

  • If you terminate your employment on or after May 31, 2010, your contributions are now automatically "locked-in" the plan, regardless of the length of service. Previously, you could apply for a refund of contributions and interest with less than 2 years of qualifying service.

Exception for "small benefits": If the commuted value of your pension upon termination or retirement is below a specified amount, the pension benefit is considered to be "unlocked" and eligible to be refunded. The minimum limit for unlocking small benefits is if the annual pension is less than 4% of the Yearly Maximum Pensionable Earnings (YMPE) or the commuted value is less than 20% of the YMPE. The YMPE for 2010 is $47,200.00.

3) Retirement Benefits

  • Normal Retirement at age 65
    • If you retire at the "normal retirement age" of 65, you are eligible for a pension regardless of the length of service.
  • Early Retirement - age 55 (do not have Rule of 80)
    • If you retire on or after age 55, you are eligible for an early retirement pension, regardless of the length of service.  If you have less than 5 years of service, your pension will be reduced by an amount equal to the actuarial equivalent of the pension that would have been payable at age 65. 

4) Postponed Retirement - after age 65

  • If you retire anytime after your 65th birthday, you are eligible for a postponed retirement pension regardless of the length of service. You will be entitled to a pension upon retirement equal to the greater of:
    • The full formula pension based on all your years of service or,
    • A pension in an amount equal to the actuarial equivalent of the pension that would have been payable at age 65.

5) Pre-retirement death benefit

  • Entitlement to the survivor benefit can be waived by the spouse or common-law partner before or after the member's death. This waiver may be revoked by both the member and the spouse or common-law partner at any time before the member's death.  The waiver and revocation forms are available from MEBP.
  • The spouse or common-law partner is eligible for the survivor benefit only if they were living with the member at the time of the member's death.

6) Relationship breakup

  • In order to apply for the division of the pension, it is now acceptable to provide MEBP with a court order from another Canadian jurisdiction requiring the division of pension assets. A court order under The Family Property Act or a written agreement between the parties indicating assets have been divided continues to be acceptable documentation to trigger the division of the pension.
  • A spouse or common-law partner who is entitled to a division may, upon the death of the member, waive the entitlement.

Please note that this is a summary only.  Additional information will be provided as it becomes available. If you have any questions, please do not hesitate to contact our office at 1-800-432-1908 (ext. 206 or 244)