OSPC: News
1. Responding to workforce changes lets plan members create retirement plans to suit their needs
Many employees today are experiencing more frequent job changes. There is an increased interest by employees in managing their retirement fund. The new legislation allows members to plan for their unique needs in retirement.
Required under the new legislation:
- From the day employees start contributing to their pension plan they are vested in their pension benefits rather than having to wait a minimum of two years.
- Plan members who work past age 65 and choose to delay starting their defined benefit pension will have increased pensions when they do retire.
- Defined benefit plan - on early retirement a member's pension payments may be reduced. This is because benefits are likely to be paid over a longer period of time. But the reduction in the payments can be no greater than if the payments are actuarially reduced, which is generally about 6 per cent for each year the member retires before normal retirement.
- The processing time for the one-time 50 per cent transfer of locked-in funds to an unlocked Registered Retirement Income Fund is shortened.
Your plan sponsor may choose to offer phased in retirement:
- Members of defined benefit plan who are nearing retirement can work reduced hours and still contribute to their pension plan even while they collect partial pension benefits. This phased retirement would support workforce renewal and mentoring.
