What if plan members terminate employment?

Non-vested Member

If, at the time of termination plan members have less than five years of pensionable service, they have not earned a vested right to a lifetime pension. Therefore, upon termination, their benefits involve only their own contributions and interest. The options are as follows:

1. receive a cash refund of the plan member’s contributions and interest (less required withholding tax), or
2. transfer their (employee) contributions and interest directly from the USPP to an individual RRSP, thus deferring tax implications, or
3. transfer their termination benefit directly from the USPP to the pension plan of their new employer (provided that Plan permits such transfers), or
4. leave their contributions in the USPP. This would enable them to link their service accumulated to the date of termination, with future pensionable service should they become re-employed in a pensionable position under the USPP.

Vested Member

If plan members have accumulated at least five years of pensionable service they are vested . “Vested” means that they have earned the right to a lifetime pension. The options of a vested member vary according to age and service. Please note that if eligible for an immediate pension, plan members do not have the option of a commuted value payment. Furthermore, it is important that plan members read the entire section on “Vested Member” to be certain of the options available. An election form, detailing the options available, will be provided to vested plan members upon termination of employment.

Upon termination, if plan members have accumulated five years of pensionable service they may elect within 180 days after termination:

1. to transfer the “commuted value” of their pension entitlement to a “locked-in” RRSP (subject to CRA limits), or
2. a return of the plan member’s contributions plus interest in respect of pensionable service performed before January 1, 1997; and a transfer of the commuted value of the pension entitlement representing pensionable service performed after January 1, 1997 to a locked-in RRSP, or
3. to transfer their termination benefit directly from the USPP to the pension plan of their new employer (provided that Plan permits such transfers), or
4. to leave their contributions in the USPP and either:
   1. receive a deferred pension payable from the earliest eligible retirement age or,
   2. link the vested service with future service in the event that they are re-employed in a pensionable position under the USPP

Note: The commuted value will not be less than the value of the employee’s contributions and interest. Employees who do not select an option, within 180 days after termination, are deemed to have elected a deferred pension.

GROUP INSURANCE BENEFITS ARE FORFEITED WHEN A PLAN MEMBER ELECTS TO RECEIVE A BENEFIT IN THE FORM OF A COMMUTED VALUE AND/OR WHEN THEY RECEIVE A REFUND OF CONTRIBUTIONS AND INTEREST.