Bill 213 2009

An Act to amend the Pension Benefits Act respecting transfers on wind ups

Note: This Act amends the Pension Benefits Act.  For the legislative history of the Act, see the Table of Consolidated Public Statutes – Detailed Legislative History at www.e-Laws.gov.on.ca.

Her Majesty, by and with the advice and consent of the Legislative Assembly of the Province of Ontario, enacts as follows:

   1.  Section 73 of the Pension Benefits Act is amended by adding the following subsections:

Same, former member receiving a pension

   (3)  A former member who is receiving a pension is entitled, on the wind up of the pension plan, to require the administrator to pay an amount equal to the commuted value of the pension,

  (a)  into a prescribed retirement savings arrangement; or

  (b)  for the purchase for the former member of a life annuity that will commence immediately after the transfer.

Same, survivor of a former member

   (4)  A survivor who is receiving a joint and survivor pension is entitled, on the wind up of the pension plan, to require the administrator to pay an amount equal to the commuted value of the pension,

  (a)  into a prescribed retirement savings arrangement; or

  (b)  for the purchase for the survivor of a life annuity that will commence immediately after the transfer.

Commuted value

   (5)  For the purposes of subsections (3) and (4), the commuted value of a pension is to be determined in accordance with the regulations.

Exercise of entitlement

   (6)  A former member or a survivor of a former member shall exercise his or her entitlement under subsection (3) or (4), as the case may be, in accordance with the regulations.

Prescribed requirements

   (7)  The entitlements referred to in subsections (3) and (4) shall be determined in accordance with such criteria as may be prescribed.

Prescribed retirement savings arrangements

   (8)  For the purposes of subsections (3) and (4), prescribed retirement savings arrangement has the same meaning as in clause 42 (1) (b).

Commencement

   2.  This Act comes into force on the day it receives Royal Assent.

Short title

   3.  The short title of this Act is the Pension Benefits Amendment Act (Transfers on Wind Up), 2009.

EXPLANATORY NOTE

The Bill amends the Pension Benefits Act to expand the transfer rights that are available on the wind up of a pension.  On the wind up of a pension plan, the Act currently allows individuals who are entitled to a pension benefit but are not receiving a pension to transfer the value of their pension to another pension plan, a prescribed retirement savings arrangement, or a life annuity.  Prescribed retirement savings arrangements include RRSPs and RRIFs.  The Act is amended to enable pensioners and survivors to transfer the value of their pensions, on the wind up of a pension plan, to either a prescribed retirement savings arrangement or a life annuity.