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How do I access my pension money?
In general, pension money is locked-in until age 55 (or another age, if your particular plan provides for an earlier retirement). If pension funds are locked-in, they cannot be taken out of the pension plan or locked-in retirement account (LIRA) as a cash payment. Locked-in money can only be accessed at retirement, in order to provide you and your spouse with retirement income.
There are three exceptions to the locked-in rules:
Shortened life expectancy
A pension plan or LIRA may allow for pension funds to be unlocked, over a fixed term or as a lump sum, if you have a shortened life expectancy. In order to qualify as an exception, your condition must be certified by a qualified medical practitioner.
You may qualify for an exception to the locked-in rules in cases where the value of your pension funds is low enough, compared to the year’s maximum pensionable earnings (YMPE). The federal government sets the value of the YMPE every year.
Pensions Plans – Pensions may allow unlocking, when you terminate membership or retire, instead of issuing regular payments at retirement, if your pension is considered “small.” Your pension is “small” if:
A. The commuted value (the lump sum amount that would need to be invested today in order to pay for your benefits at retirement) of your defined benefit pension, or the total value of your defined contribution account, does not exceed 20% of the YMPE; or
B. The current value of your annual pension payments does not exceed 4% of the YMPE.
LIRAs - A LIRA contract may allow the funds to be unlocked if the total value of your locked-in money, including all LIRAs and deferred pension entitlements (which result where a person terminates pension plan membership, but does not transfer the funds out of the plan), does not exceed 20% of the YMPE.
A pension plan may, and a LIRA must, allow your pension to be unlocked if you meet the following non-residency requirements:
You are a non-resident of Canada according to the Income Tax Act (Canada) (the ITA);
You have provided the pension administrator, or LIRA contract issuer, written evidence that the Canada Revenue Agency has determined that you are a non-resident under the ITA;
You have completed and filed, with the pension administrator or LIRA contract issuer, a certificate of non-residency (Form 4);
You have not lived in Canada for two consecutive years, or longer; and
If you have a spouse, you have obtained the spouse’s consent to the withdrawal and waiver the entitlement (Form 5), and filed a copy of the completed form with the pension administrator or LIRA contract issuer.
For more information, please see the Unlocking Pension Money Guide.
How do I know if Saskatchewan pension laws apply to me?
The Pension Benefits Act, 1992 (the Act) applies to all members of employer-sponsored pension plans within the province, no matter where the plan is registered. Some plans, however, are not covered by the Act. Some of the exceptions include:
Employee profit sharing plans, deferred profit sharing plans, retiring allowances, or ordinary (not locked-in) registered retirement savings plans (RRSPs);
Federally-regulated pension plans, such as those for airlines, railways, grain handlers, radio broadcasting stations, and banks;
Pension plans for federal government employees, including the royal canadian mounted police and armed forces; and
Certain specific pension plans that the Government of Saskatchewan created for its own employees.
Benefit standards, such as vesting and survivor benefits, are set by the jurisdiction in which you are employed. If you work in Saskatchewan, but your plan is registered elsewhere, you should ensure that the plan administrator understands your rights under Saskatchewan law, particularly on termination of employment or retirement.
If you are employed in Saskatchewan at the date you terminate employment or retire, then Saskatchewan's locked-in retirement account (LIRA) and prescribed registered retirement income fund rules will apply to your pension money, no matter where you live. If you terminate employment in Saskatchewan, transfer your pension money to a Saskatchewan LIRA and move to British Columbia (B.C.), for example, your money must remain in a Saskatchewan LIRA. The funds cannot be transferred to a B.C. LIRA. However, nothing would prevent a financial institution located in B.C. from administering a LIRA that meets the requirements of the PBA.
Can I receive a pension while I am still working?
Pension plan members are able to receive pension benefits from a defined benefit plan while working and accruing further benefits from that pension plan, subject to certain conditions.
Phased retirement (receiving pension benefits while working and accruing further pension benefits) is an optional plan provision, and it is up to the employer to determine whether a pension plan will offer phased retirement. It is also the employer’s decision to determine what the terms and conditions of the arrangement are, subject to pension and income tax legislation.
Pursuant to the Income Tax Regulations (Canada), phased retirement benefits are not permitted for a designated plan, or for an employee who was at any time considered to be a connected person with a participating employer.
What are my options when I retire?
You are eligible to receive a pension when you reach the normal retirement date specified by your pension plan. However, you may retire any time you are within ten years of the normal retirement date. If, for example, your plan has a normal retirement date of 65 years of age, you have the right to retire and begin to receive a pension at any time after reaching age 55. By selecting an early retirement option, the amount you will receive may be reduced.
If you have transferred money from your plan to a locked in retirement account (LIRA), then your pension can commence at the earliest of:
age 55; or
an early retirement age specified in the plan where the money originated.
A pension is a life annuity, meaning it is paid in intervals during the life of the recipient. If you have a spouse, pension legislation requires that your pension be offered in a "joint and survivor" form. Your surviving spouse will receive a lifetime pension of at least 60% of the pension that you were receiving. There are, however, three exceptions to the requirement that a spouse receives a joint and survivor annuity:
Your spouse waives the requirement that the annuity be a 60% joint and survivor annuity
You may receive a pension that does not offer the 60% survivor benefit if your spouse signs a waiver form (form 3) prior to the pension commencing. Your spouse must sign a waiver prior to the purchase of a single life annuity or an annuity with a survivor benefit of less than 60%.
Your spouse consents to having the pension money transferred to a prescribed Registered Retirement Income Fund (pRRIF)
You may transfer pension money to a pRRIF which is described in Section 29.1 of the Regulations. Your spouse must sign a consent form (form 1) before the transfer can be made and must be designated as the beneficiary of a pRRIF, but may waive his or her status as beneficiary by signing a waiver form (form 2).
Your spouse consents to having the pension money transferred to a variable benefit
A member or former member of a defined contribution plan, that offers a variable benefit from the plan, may establish a variable benefit account at retirement. A variable benefit is similar in nature to the pRRIF. Your spouse must sign a consent form (form 2.01) before a variable benefit account can be established. In addition, your spouse must waive entitlement to the 60% survivor benefit, provided by the PBA, by signing a waiver form (form 3). Your spouse must also be designated as beneficiary for the variable benefit account, but may waive his or her status as beneficiary by signing a waiver form (form 2.02).
Pooled Registered Pension Plans (PRPP)
You may be able to transfer your pension money to a PRPP and receive your retirement income from the PRPP. Read the PRPP webpage for more information.
For more information about retirement options, read the Retirement Options Guide.
What are my options when I leave my employer?
Your options depend on your personal circumstances at the date you terminate employment.
If you are vested
If you are vested you have an unconditional right under the plan to receive a pension, as you have satisfied the age or service requirements. Saskatchewan legislation specifies the maximum period that members must work before becoming vested. For benefits earned before January 1, 1994, you are vested if your age plus years of continuous service, or membership within the plan, total 45 years or more. A minimum of 1 year of continuous service or membership is also required for vesting. Benefits earned after January 1, 1994, are vested when you have completed two years of continuous employment. In either case, you must satisfy the vesting rule at the date that your membership terminates. Some plan sponsors allow members to vest earlier than the legislation requires.
If you are vested but not yet eligible to receive a pension from your plan, you have the right to transfer the value of your pension from the plan into a locked-in retirement account (LIRA). "Locked-in" funds cannot be withdrawn or surrendered; they must be used to provide pension income.
If you are vested and eligible to start your pension, the plan is not required to allow you to transfer money out. The plan could require you to receive a pension directly from the plan.
If you are not vested
If you are not vested, when you terminate your membership you will not receive a pension from the plan. However, if you contributed to the plan, your contributions will be refunded with interest.
Your pension plan may also provide you with options related to pooled registered pension plans (PRPPs). Read the PRPP webpage for more information.
For more information about pension plans, read the Member’s Guide.
How does a relationship breakdown affect my pension?
A division of pension funds can only occur on the breakdown of a spousal relationship and in accordance with a court order or interspousal agreement under The Family Property Act. A division cannot occur without either a court order or interspousal agreement. The division of pension benefits is not mandatory. A couple may prefer, or the courts may order, a division of family property that does not involve dividing pension benefits.
Where pension benefits are divided, you must maintain a prescribed minimum interest in the plan. A division of pension benefits must not reduce the commuted value of the member's benefits to less than 50% of the commuted value of the member's benefits prior to the division.
For more information regarding division of pension benefits on breakdown of a spousal relationship, read the Relationship Breakdown bulletin.
How can maintenance enforcement affect my pension?
The Maintenance Enforcement Office (MEO) of the Saskatchewan Ministry of Justice collects court-ordered maintenance payments on behalf of Saskatchewan children and families. The Enforcement of Maintenance Orders Act , 1997 authorizes the Director of the MEO to “attach” pension funds as a last resort for enforcing maintenance orders. A pension fund “attachment” is limited to the pension entitlements of former members who are not yet receiving their pensions. Current members and pensioners are excluded, as the MEO can garnish their wages or pension.
For more information regarding enforcement of maintenance orders read the Maintenance Enforcement Orders bulletin.
Where can I get more information about multi-jurisdictional pension plans?
The governments of Saskatchewan, British Columbia, Nova Scotia, Ontario, and Quebec signed the 2016 Agreement Respecting Multi-Jurisdictional Pension Plans (the 2016 Agreement) which came into effect on July 1, 2016. The 2016 Agreement was developed by the Canadian Association of Pension Supervisory Authorities to provide a clear legal framework for the administration and regulation of multi-jurisdictional pension plans. Multi-jurisdictional pension plans are registered in only one jurisdiction, but have members in multiple jurisdictions.
For jurisdictions which are not party to the 2016 Agreement, there are two older agreements in force; the 1968 Memorandum of Reciprocal Agreement applies between Saskatchewan and the remaining provinces except Prince Edward Island which does not regulate pension plans and the 1969 Memorandum of Reciprocal Agreement applies between Saskatchewan and the Government of Canada.
For more information on the agreements, visit the Canadian Association of Pension Supervisory Authorities’ website.