Manitoba Labour and Immigration
The Manitoba Pension Commission
Revised January 2002
The main objective of the Pension Benefits Act is to safeguard employees' rights to benefits promised under private pension plans. Over the years, the rights of employees to obtain information have increased. There is now more protection for the spouse or common-law partner of a contributing member. In addition, employees who leave their jobs now have new options regarding transfers of their pension credits.
PLANNING NOW FOR YOUR FUTURE
Employees want to know they will have the financial stability to enjoy their retirement years. However, that takes planning - not just in the few years before retirement, but throughout a working career.
While government programs provide a certain level of retirement income, more and more employees are preparing for retirement through private pension plans sponsored by their employers.
This is where the Manitoba Pension Commission is of service, by promoting the advantages of private pension plans and assisting both employees and employers in understanding these plans.
What is a private pension plan?
Private pension plans are established and maintained by private sector employers (or groups of employers or boards of trustees) to provide retirement income for plan members. In Manitoba, private pension plans are regulated by the Pension Benefits Act which is administered by the Manitoba Pension Commission.
Funds of a private plan are held through trust agreements and insurance contracts and benefits are provided by contributions from employers, and in some cases through member contributions. Investment earnings on these contributions also help pay for benefits.
THE PENSION BENEFITS ACT
The main objective of the Pension Benefits Act is to safeguard employees' rights to benefits promised under private pension plans.
More specifically, the Act requires that plans provide for:
- eligibility and membership conditions that define when employees may and must join an available pension plan;
- full entitlement to pensions provided under the plan after 2 years of employment, at pensionable age, or on employment termination;
- portability of pensions through options to transfer benefits, on termination of membership, to an approved locked-in plan;
- reasonable rate of interest on member contributions;
- minimum information requirements for plan members, including an outline of plan provisions, annual statements and access to certain plan documents;
- protection of pensions from seizure, withholding or garnishment;
- regular payment of all contributions to a pension plan (those made by employers and by members) and,
- prudent investment requirements.
The Act requires that pension funds be kept separate and apart from the assets of the employer. It also ensures that no pension funds are diverted for other purposes until all benefits accrued have been provided.
ACTIVITIES OF THE MANITOBA PENSION COMMISSION
The branch carries out a variety of activities to see that the requirements of the Manitoba Pension Benefits Act are met.
The branch registers new plans, and monitors all existing plans to ensure that:
- the plan provisions comply with legislation;
- plans are administered correctly in accordance with the legislation;
- contributions made in a given year are sufficient to cover benefits earned in that year, and that contributions are made within allowable time periods
Finally, when a plan is terminated, the Commission must consent to the proposed distribution of plan funds before the distribution can take place.
HOW THE BRANCH HELPS EMPLOYEES
The Manitoba Pension Commission staff assist employees explaining how pension-related legislation affects them and answer questions regarding plan provisions.
Assistance includes:- investigating complaints to assist in settling disputes;
- explaining various provisions of pension plans and the options available to members;
- explaining employees' responsibilities as plan members; and
- investigating cases of overdue refunds or payments.
HELPING EMPLOYERS AND FUND ADMINISTRATORS
A private pension plan is an important part of an employer's benefits program and can help an employer attract and retain employees.
The Manitoba Pension Commission encourages and assists plan sponsors, trustees and administrators to establish, maintain and improve their pension plans.
Assistance includes:- offering advice on how to establish a pension plan;
- explaining the types of plans and the funding vehicles available;
- explaining an employer's or trustee's responsibilities under The Pension Benefits Act;
- explaining plan provisions and the employer's or trustee's responsibilities under the plan;
- conducting workshops and presentations on the Act to employer/employee groups when requested;
- acting as a liaison between employers and funding agencies if problems develop; and
- explaining the required procedures for special circumstances such as plan wind-up or merger
Staff of the Pension Commission are available to meet with employers, trustees, plan administrators and members to discuss specific concerns.
