On Nov. 29, 2013, the Ontario government announced that section 80.1 of the Pension Benefits Act (PBA) will take effect on Jan. 1, 2014 and also introduced Regulation 308/13 that will take effect on the same day to complement the new legislation. This new legislation sets out a framework for the consolidation of pension benefits for certain public sector pension plans where members transferred from one pension plan to another as a result of a divestment that occurred prior to Jan. 1, 2014.
These legislative changes will permit HOOPP to enter into transfer agreements with OMERS, OPSEU Pension Trust, Ontario Pension Board and VON Canada Pension Plan that will provide eligible divested members with the option to transfer their pension benefits from their former pension plan to HOOPP and other eligible members to transfer their pension benefits from HOOPP to their current pension plan.
HOOPP began meeting with some of the other public sector pension plan administrators earlier in 2013 to prepare for the possibility that eligible members would have the ability to transfer their benefits from their former pension plan to their current pension plan and to discuss the terms of a potential transfer agreement.
Now that the legislation and regulations are in place to facilitate transfers for past divestments, HOOPP is in the process of establishing transfer agreements with the other public sector pension plans. Once the transfer agreements have been finalized they will need to be approved by HOOPP’s Board of Trustees and by each of the other pension plans that are party to the agreements. The transfer agreements will then need to be filed with the Financial Services Commission of Ontario (FSCO) before any transfers can occur.
Following this, HOOPP will perform the necessary calculations and provide eligible members with personalized information packages that outline their individual election options. Given that thousands of members have been impacted by divestments prior to Jan. 1, 2014, HOOPP and the other public sector pension plans have agreed that packages will be mailed out to affected members through a staged-approach over a period of a few months later in 2014. The transfer calculations that will be included in the election packages will not be affected by this staged-approach as they will all be based on the same calculation date, regardless of the date that the election options are sent to each eligible member.
According to the current legislation, all transfers must be completed no later than Jun. 30, 2015.
On Dec. 11, 2013, the provincial government introduced Bill 151, the Strengthening and Improving Government Act, 2013. Bill 151 is not yet in effect but if it does pass it will extend the deadline for all transfers to be completed from Jun. 30, 2015 to Jun. 30, 2016. The changes to the PBA proposed in Bill 151 may also impact how pension plans determine which members are eligible to consolidate their pension benefits in their successor pension plan.
HOOPP will continue to monitor the progress of Bill 151 and provide further updates about past divestment transfers on hoopp.com as information becomes available.