Moving To Another Pension Plan
What is a service transfer?
When pension plans participate in a reciprocal transfer agreement, a person who moves from one participating pension plan to another (due to a change in employment) can choose to transfer their service, which may grant them certain advantages.
If you have service with another participating pension plan, you may wish to transfer that service to TRAF so that it can count toward your TRAF pension. Or, if you are leaving employment as a teacher in the Manitoba public school system, you may wish to transfer your TRAF service to your new employer’s pension plan.
Why transfer service?
Transferring your service into one plan offers the following advantages:
- Combines two smaller pensions into one
- Helps you meet eligibility rules with your new plan
- Reduces or eliminates early retirement penalties
- Provides you with a larger pension by allowing all service to be based on potentially higher salaries
Eligibility
You must have ceased membership in your previous pension plan, have at least 20 days in the plan you are transferring to, and you must not be receiving your pension from either plan yet (Please note that transfers can take six months or longer to complete). Each plan has its own rules with respect to the service that can be transferred.
Outstanding issues such as settlements of marriage or common-law relationship breakdowns and service purchases must be finalized before the transfer can take place.
You can only transfer to the plan in which you have been employed most recently.
Eligible plans
TRAF has reciprocal transfer agreements with the following organizations:
- Alberta Teachers’ Retirement Fund Board
- Teachers’ Pension Board of Trustees (British Columbia)
- Canadian Teachers’ Federation Employees’ Pension Plan
- Civil Service Superannuation Board (Manitoba)
- Healthcare Employee Benefit Plans (Manitoba)
- Legislative Assembly Pension Plan (Manitoba)
- Province of Newfoundland and Labrador Department of Finance
- Nova Scotia Pension Services Corporation
- Ontario Teachers’ Pension Plan Board
- Teachers’ Superannuation Commission (Prince Edward Island)
- Vestcor Inc. (New Brunswick)
- Quebec Pension Commission
- Saskatchewan Teachers’ Federation
- Saskatchewan Teachers’ Superannuation Commission
- The Pension Plan for Officers and Employees (other than teachers) of the Winnipeg School Division
How it works
The plan you are leaving will provide you with details such as the amount available to transfer and what your benefit will be if you decide not to transfer.
The plan you are transferring to will provide you with information such as the effect the transfer will have on your pension, the transfer amount required and any shortfall that might exist.
After you receive this information, you can decide whether you would like to proceed with the transfer.
Transfers can take six months or longer to complete.
If you have sufficient funds in your previous plan, you will receive full service credit in your new plan.
If you do not have sufficient funds in the previous plan, you will be credited with partial service, and you will have the option to pay the shortfall to receive full service.
The transfer amount is based on a number of variables, including the salary you are earning, the plan formula and the actuarial assumptions used by each plan. Together, these factors will determine whether there are sufficient or insufficient funds. The amount of transferred service you are credited with may be capped if there is an overlap in service between each plan.
The transfer amount is based on a number of variables, including the salary you are earning, the plan formula and the actuarial assumptions used by each plan. Together, these factors will determine whether there are sufficient or insufficient funds. The amount of transferred service you are credited with may be capped if there is an overlap in service between each plan.
Important:
If you transfer your TRAF service to another plan, then return and request a service transfer back to TRAF, you may not receive full credit for your original TRAF service.
RRSP contribution room may be Impacted
A transfer from one plan to another plan may have an impact on your existing RRSP contribution room. You will be notified whether your RRSP room has increased or decreased after your transfer is complete. In some cases, there is no impact on your RRSP contribution room.
How to proceed
If you are interested in transferring service, complete a Service Transfer Application and forward it to both the plan you are leaving and the plan you are transferring to. You will also need to provide a copy of your birth certificate.
Consider all of the above when making your decision. Contact our office to discuss the details with a Member Services Specialist.
