Electing to Terminate
Electing to Terminate
After May 2010 and according to Section 38 of the Ontario Pension Benefits Act, a member of a multi-employer pension plan, who stops working with a Contributing Employer and who is entitled to a benefit is not considered terminated until he voluntarily elects to terminate membership in the pension plan. After 24 consecutive months without any pension contributions being made on the member's behalf, he/she may elect to terminate his/her membership in the Plan by delivering a signed Voluntary Election to Terminate Membership Form to the LPF office.
When a voluntary termination occurs, you are able to take the value of your pension in a lump sum and transfer it out of the plan.
To protect the benefits of all plan members, a plan amendment was introduced in February 2013 to require the permanent reduction in the plan benefit paid out based on the funding level of the plan on a “solvency basis”, which is the percentage of benefits that would be paid out if the plan itself were to be terminated. This permanent reduction will also apply to a deferred pension if the member chooses to terminate and then elects the Deferred Pension option.
Reduction only applies if you voluntarily terminate plan membership
It’s important to note that this reduction only applies if you voluntarily terminate your plan membership and work in Ontario or Prince Edward Island.
If you don’t voluntarily terminate membership in the Plan, you will remain a member of the Plan until you retire and these benefit reductions will not apply to you.
Members of other provinces who elect to voluntarily terminate their membership will not be affected by these reductions; however, they may lose entitlement to some future pension benefits as they will no longer be considered plan participants.
How to voluntarily terminate your membership in the Plan
You are eligible to voluntarily terminate your plan membership any time after a period of 24 consecutive months without any contributions being remitted to the LPF on your behalf. After that time, you may request a Voluntary Election To Terminate Membership Form from the LPF office. This form will provide you with an estimate of your benefit.
To complete your termination request, a Pension Analyst will calculate your pension, send you the form, then you must sign the form and mail it to the LPF office. The date of your termination will be effective the date we receive the signed form.
If we don’t receive your signed form, you will continue to be a member of the plan until you retire or make an election to terminate your membership in the Plan.
Questions? Please contact the LPF Office for more information.