OSPC - FAQS - Overview of Manitoba Pension Laws

Termination/Ending Employment

  1. What are my options when my employment ends?

    Defined Contribution Plans

    If you are a member of a defined contribution pension plan, you are entitled to receive your own contributions (if any) and the contributions your employer made on your behalf, with interest. Any funds that are not locked in are available as a cash withdrawal.

    You must be allowed to choose what you want to do, either:

    • leave the money in your employer's pension plan or
    • transfer your locked-in funds to a Locked in Retirement Account (LIRA)

    Defined Benefit Plans

    If you are a member of a defined benefit pension plan, you are entitled to the pension benefits under the terms of the plan. Any funds not locked in are available as a cash withdrawal.

    If you have not reached the early retirement age stated in the plan, you must be allowed to choose what you want to do, either:

    • leave the money in your employer's pension plan or
    • transfer your locked in funds to a Locked in Retirement Account (LIRA)

    A member of a defined benefit plan, who has reached the early retirement age stated in the plan, may only transfer the locked in funds to a Locked in Retirement Account, if the plan allows it.

  2. What are excess contributions?

    If you are a member of a defined benefit pension plan (which means your monthly pension is described by a formula, usually based on salary and years of service), and an employee is required to make contributions to the plan, the employer must pay at least 50 percent of the value of the pension benefits you earned after January 1, 1985. This rule applies in all pension calculations.

    For example:

    Pension Cost:

    $4,700

    Employee Contribution with interest
    (from Jan. 1/85 to termination):

    $4,000

    Excess Contribution:

    $4,000 - ($4,700 x 50%) = $1,650

    The member is entitled to a locked in pension of $4,700 consisting of equal contributions from the employee and employer ($2,350 each), plus the excess employee contribution.

    Excess contributions can:
    • be taken as a cash refund
    • used to increase the member's pension or
    • transferred to a RRSP if the federal Income Tax Act allows it
  3. What are the rules for providing information on my benefits and time to process them?

    Under the act, when your employment ends, the plan administrator has 60 days (or 60 days after the administrator becomes aware your employment has ended) to provide a statement of your benefits. You, as a plan member, have 90 days to choose how you want to receive your benefit. If you are transferring your benefits out of the plan, the plan administrator must make the transfer within 90 days, after the administrator receives all of the necessary documents to make the transfer.

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