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The benefits of merging Ontario pension plans

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Tommy:

Over the years numerous union employees working at the Municipal Property Assessment Corporation “MPAC” have previously and repeatedly written the government and various parties about their unfair and unjust split pension situation as a result of a past government divestiture and pension decisions not of their own making or choice. As they have always indicated, in any avenue of resolution for such perspective pensioners its obviously very important to ensure continuation of their existing entitlement to the post-retirement health and dental insured benefits associated through their past OPS service and credit in the OPTrust Plan.

While Bill 236, the Pension Benefits Amendment Act, 2010, received Royal Assent in May 2010, it only allows for a one-way transfer of assets to the successor employer’s plan… and were divested employees to consolidate their service under the successor employer’s plan “OMERS” their eligibility for insured benefits under the original Provincial plan “OPTrust” would be discontinued. The Province has advised MPAC on previous occasions that they would not extend the insured benefits to retirees who no longer meet the eligibility criteria. In fact, four years ago in June of 2008 the Minister of Government and Consumer Services had written the Chair of MPAC’s Board of Directors about just such a pension transfer scenario, advising in part “If divested MPAC employees withdraw or transfer their OPS pension assets and thereby terminate OPS pension entitlement status, they will forfeit access to future post-retirement insurance coverage.”

The ultimate test of the regulatory system governing pension plans is how well it works in practice. With respect, under the circumstances it seems to me this only pension transfer option inherently comes with what amounts to an illogical, unfair and hefty penalty being imposed on such workers/perspective pensioners… the forfeiture of their existing entitlement to postretirement
health and dental insured benefits associated through their previous OPS employment and credit in the original plan “OPTrust” ! As such, this is not a viable option for most and, in fact, I wonder if the Superintendent would even actually consent to such a transfer knowing individuals might be so directly or indirectly detrimentally impacted.

Sunday, April 20 at 9:37 am |

R. Johnston:

Absolutely. It is neither fair or reasonable these employees / pension plan members, who were denied portability of their pensions through no fault of their own, be adversely affected for the rest of their lives.

Reforms to the Pension Benefits Act need to allow eligible employees to transfer / consolidate their existing pension benefits and ancillary benefits and other non – pension post-retirement benefits that they currently have [associated with either or both the original and successor plans] to the one original OPS plan “OPTrust”. More specifically, Section 80.1 (4) and (9) of the Act needs to be updated to include authorizing eligible employees to elect to transfer the value of their accrued pension benefits under the successor pension plan to the original pension plan.

Many affected employees with pensions split between the OPTrust and OMERS plans wish to consolidate their pensions in OPTrust and retire. They simply want fair pension treatment and to rightfully retire one day without unfair financial or post-retirement insurance coverage worries.

Saturday, April 26 at 11:17 am

Helen:

Yes, over the years many affected MPAC employees with split pensions have previously written the Ontario Government regarding amendments to the the Pension Benefits Act (PBA) and provided constructive comments about the draft regulations that were being proposed.

Those with 10 or more years service / credit in the original OPS plan (OPTrust) stressed the obvious need that a fair and viable resolution should ensure continuation of their existing entitlement to the post-retirement insured health care benefits. These post-retirement insured health care benefits are separately provided by the government (not the Plan).

I understand, however, that the recently announced new asset transfer regulations only allow for a one-way transfer of assets to the successor employer’s plan. In fact, interesting enough six years ago the Minister of Government and Consumer Services had already written about the consequences of just such a pension transfer scenario, saying in part “If divested MPAC employees withdraw or transfer their OPS pension assets and thereby terminate OPS pension entitlement status, they will forfeit access to future post-retirement insurance coverage.”

With respect, am I to understand that the election of the only pension transfer option under the new asset transfer provisions still comes with what amounts to an illogical, unfair and hefty penalty… the forfeiture of their highly valued post-retirement insured health care benefits separately provided by the Ontario Government. As affected stakeholders had repeatedly pointed out to the Ministry of Finance, this is not a realistic or viable option for many. Is this, in fact, really just another cost savings measure by the government on the backs of hard working Ontarians.

Indeed, it is disappointing the Ontario Government apparently has still not addressed the long outstanding split pension / post-retirement insured health care issues…

Saturday, April 26 at 9:54 am |

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