Pension Plan Amendments

The following amendment to The University of Manitoba Pension Plan (1993) was presented to the Staff Benefits Committee and given approval by the Board of Governors on November 16, 2010:

Pension Contribution Increases:

  • The amendment increases the matching Pension Plan contributions by 0.5% on January 1, 2011; 0.5% on January 1, 2012; and 1.0% on January 1, 2013.

Amendments to the Pension Benefits Act and Regulations - Summary of Changes Relating to the University of Manitoba Pension Plans.

 

The Pension Benefits Act and Regulations were amended and came into effect on May 31, 2010.  Plan amendments related to the legislative changes must be filed by December 31, 2011.  There are a number of new requirements such as eligibility and membership, locking-in, vesting, normal retirement age, survivor benefits, death benefits, breakdown of a relationship (married or common-law) and administrative items.

For more information on the benefits and settlement issues affected by these amendments, please link to:
Pension Plan Benefits Amendments - Amendments to the Pension Benefits Act and Regulations

 

The following amendments to The University of Manitoba Pension Plan (1993), The University of Manitoba G.F.T. Pension Plan (1986) and The University of Manitoba Pension Plan (1970) was presented to the Staff Benefits Committee and given approval by the Board of Governors on January 26, 2010:

Housekeeping Items - The University of Manitoba (1993), (1986) and (1970) Pension Plan:

  • Amendments were made adding semi-monthly paycycles to the contribution calculation, and clarifying that membership begins at the beginning of the paycycle rather than the beginning of the month.

Pensioner Account - The University of Manitoba Pension Plan (1993):

  • An amendment was made subdividing the Pensioner Account to reflect differences between Plan Pensions as a result of pre-December 1, 2008 and post-November 30, 2008 retirements.

    The actuary conducted a mortality study in 2008 to examine the pension plan's mortality experience and to determine the mortality basis that should be used on a going concern basis to avoid locking in losses when plan members convert their account balances to annuities at retirement.  The results of the study revealed that on a combined benefit weighted basis the overall mortality as a percentage of the standard mortality on average is 64%.  The mortality table was adjusted for all pensions commencing on December 1, 2008.  As the mortality basis changed significantly the actuary recommended that a new Pensioner Account be established to distinguish the Pensioners who retired after November 30, 2008.  By creating a new Pensioner Account, the gains/losses can be tracked on a more equitable basis otherwise there is a chance of subsidization of the two groups of Pensioners.

 

The following amendment to The University of Manitoba Pension Plan (1970), The University of Manitoba G.F.T. Pension Plan (1986) and The University of Manitoba Pension Plan (1993) was presented to the Staff Benefits Committee and given approval by the Board of Governors on November 25, 2008:

Delayed Commencement of Retirement Benefit:

  • This amendment provides for a deferral period for staff members who are age 69.  During the deferral period no contributions are made by the employee or the University but the pension account receives the investment return; either positive or negative.  This option is voluntary for plan members who must commence pension by the end of the year in which they turn age 69.  The deferral option would be permitted to the end of the year in which the staff member attains age 71.

 

The following amendments to The University of Manitoba Pension Plan (1993) were presented to the Staff Benefits Committee and given approval by the Board of Governors on May 20, 2008:

Effective January 1, 2008

The University of Manitoba Pension Plan (1993) has been amended to:

  • Clarify the interest rate calculation for the determination of the Base Rate.
  • Permit the commuted value of the supplementary pension to be transferred out of the pension plan on retirement. A supplementary pension is calculated if the defined benefit pension is greater than the pension based on the defined contribution account balance.

The following amendments to The University of Manitoba Pension Plan (1970), The University of Manitoba G.F.T. Pension Plan (1986) and The University of Manitoba Pension Plan (1993) were presented to the Staff Benefits Committee and given approval by the Board of Governors on April 24, 2007:

Termination of employment of Members who hold only a nil appointment:

A member whose employment with the University ceases but who retains a nil appointment with the University, whereby the Member may be provided with access to certain University facilities, but there is no remuneration paid to the Member by the University and the arrangement is not a leave of absence, shall, once the nil appointment has lasted for a continuous period of 52 weeks, terminate membership in the Plan and become entitled to benefits in accordance with Article 10 of the Pension Plans.

Small Benefit Commutation for Marriage Break-up settlements:

An amendment dealing with marriage break-up clarifies that the marriage break-up settlement is subject to the commutation provisions for small pension. This means that small pension settlements may be transferred to an RRSP or be received in cash. A small pension is 25% of the Year's Maximum Pensionable Earnings (YMPE) as determined from year to year in accordance with the Canada Pension Plan.

The following amendments were presented to the Staff Benefits Committee and given approval by the Board of Governors on January 24, 2006.

Effective January 24, 2006

Reciprocal Transfer Agreements:

A Reciprocal Transfer Agreement is an agreement between the Plan and another registered plan in Canada under which an employee who ceases accruing benefits under one of the plans and commences accruing benefits under the other, may transfer contributions under the original plan to the new plan.

Transfer to the Plan under a Reciprocal Transfer Agreement will be processed in accordance with the terms of that agreement but in the event that such a transaction results in a Past Service Pension Adjustment (P.S.P.A.) which must be certified in accordance with the Income Tax Regulations, the University shall delay completion of the transfer until the P.S.P.A. have been so certified.

Reciprocal Transfer Agreements usually involve the transfer of service as well as pension funds. However, on transfer to The University of Manitoba Pension Plan, the funds will be allocated to the voluntary account. There will be no credited service apportioned to the plan member who transfer funds in.

Effective January 1, 2005 increases to the Maximum Money Purchase Limit.

The maximum limits for contributions was increased as follows:

The University of Manitoba Pension Plan (1970):
2005
$18,000
2006
$19,000
2007
$20,000
2008
$21,000
2009
$22,000

and for each year after 2009, the maximum is indexed by the greater of:

(A)
the product (rounded to the nearest multiple of $10, or, if that product is equidistant from two such consecutive multiples, to the higher multiple) of:
 
(i)
the money purchase limit for 2009, and
 
(ii)
the quotient obtained when the average wage, as defined in subsection 147.1(1) of the Income Tax Act, for the year is divided by the average wage for 2009, and
(B)
the money purchase limit for the preceding year.

The University of Manitoba Pension Plan (1993) and The University of Manitoba G.F.T. Pension Plan (1986):
2005
$18,000

and for each year after 2005, the maximum is indexed by the greater of:

(A)
the product (rounded to the nearest multiple of $10, or, if that product is equidistant from two such consecutive multiples, to the higher multiple) of:
 
(i)
$18,000, and
 
(ii)
the quotient obtained when the average wage, as defined in subsection 147.1(1) of the Income Tax Act, for the year is divided by the average wage for 2005, and
(B)
the Money Purchase Maximum Contribution Limit for the preceding year.

 

Notwithstanding the foregoing, for each year after 2005, the Money Purchase Maximum Contribution Limit shall not exceed the money purchase limit as defined in subsection 147.1(1) of the Income Tax Act.

 

The following amendments were presented to the Staff Benefits Committee and given approval by the Board of Governors on November 22, 2004.

Effective June 30, 2004

Common-law Partners
(U of M 1970 Pension Plan, U of M 1986 Pension Plan and the U of M 1993 Pension Plan)

The Act now defines "common-law partner" of a member or former member as:

a.
a person who, with the member or former member, registered a common-law relationship under section 13.1 of The Vital Statistics Act, or
b.
a person who, not being married to the member or former member, cohabited with him or her in a conjugal relationship.

 
1.
for a period of at least three years, if either of them is married,
 
2.
or for a period of at least one year, if neither of them is married.

 

 

The Pension Benefits Act (Act) now also recognizes the common-law relationship of a person who, with the member or former member, has registered a common-law relationship under The Vital Statistics Act, subject to the requirements of the Income Tax Act (Canada).

Common-law relationship means the relationship between two persons who are common-law partners of each other.

Division of Pension Benefits on Break-up

The change in legislation extends property rights and obligations to common-law partners on the breakdown of a common-law relationship.

Pension benefit credits or payments due, are subject to an equal division under The Pension Benefits Act where either:

  • an order of the Court of Queen's Bench made under The Family Property Act (formerly The Marital Property Act) exists requiring that family assets of the spouses or common-law partners are to be divided; or
  • a written agreement between spouses or partners exists dividing family assets of the spouses or common-law partners between them.

For purposes of clause (a) it should be noted that only:

  • married spouses;
  • parties to a registered common-law relationship; or
  • parties to non registered common-law relationship who have cohabited in a conjugal relationship for a period of at least three years

can obtain an order to divide family property under The Family Property Act. Otherwise, benefits and payments are divisible on the existence of a written agreement dividing family property.

Common-law partners are no longer required to file written declarations regarding the existence and termination of a common-law relationship in order that pension benefits be subjected to an equal division under the Act, as subsections 31(5) and 31(7) of the Act have been repealed.

The pension benefit credits or payments due that are subject to an equal division are those that accrued:

  • in the case of a common-law relationship, from the first day of the period in which the parties cohabited with each other in a conjugal relationship and which continued until they became common-law partners, or
  • in the case of marriage, from the date of marriage or, if there was a period in which the parties cohabited with each other in a conjugal relationship and which continued until they were married, from the first day of that period,
  • until the date that the parties began living separate and apart.

For spouses who began living separate and apart before June 30, 2004, the pension benefit credit or payments due subject to division are those from the date of marriage.

Parties can waive the mandatory splitting in accordance with the requirements of section 31(6) of the Act where they have:

  • received independent legal advice;
  • received a statement from the pension plan administrator indicating the pension benefit credit or payments due, as the case may be, to which each spouse or common-law partner would be entitled if the division was to take place; and
  • entered into a written agreement to the effect that the pension credits would not be divided between them, and the agreement must be in the form prescribed by Regulation 205/92.

For additional information on The Common-Law Partners' Property and Related Amendments Act, please visit the website at:

http://web2.gov.mb.ca/laws/statutes/2002/c04802e.php

Effective January 1, 2005

Calculation of Investment Return

(U of M 1970 Pension Plan, U of M 1986 Pension Plan and the U of M 1993 Pension Plan)

Effective January 1, 2005 the investment return for benefit calculation will go from quarterly to monthly. Section 7 of each Plan text has been amended to reflect the change in timing.

 

Pensioner Solvency Account - 1993 Plan

(U of M 1993 Pension Plan)

The Pension Benefits Act requires that the University make certain additional contributions if the Plan is in deficiency while CRA requires that the Pensioner Account, based on defined contributions, must be self-supporting. If the University was required to make additional payments due to a deficiency, these payments could not be deposited into the Pensioner Account since this would stop the Pensioner Account from being self-supporting. Therefore these additional contributions must be deposited into a new account called the Pensioner Solvency Account which satisfies the provincial regulator, and satisfies the federal regulator as the Pensioner Account is still self-supporting. If the Pensioner Account subsequently becomes solvent so that the Pension Plan no longer is required to hold funds against the deficiency then the University can use the funds as its regular pension contributions.

 

 


 

 

Questions or comments regarding Pension Benefits 
please e-mail: Pension Administration