Mar 01, 2002
Changes to Pension Termination Rules
Pension Plan Rule Changes for Termination of Active Status
VANCOUVER, B.C. - The Pension Plan Trustees have recently approved three changes to the rules for terminating active status in the Pension Plan. The first change, affecting disabled members, became effective March 1, 2002, Voluntary Termination changes took effect July 1, 2002 and the Automatic Termination rule change previously announced, will be deferred to July 1, 2003.
Disabled Members
The Plan change that took effect on March 1, 2002 affects members who are
totally and permanently disabled and who do not have the 10 years of Pension
Credit needed to qualify for a disability pension. Previously, members in
this situation who wished to transfer their entitlements out of the Plan had
to either withdraw from the union or wait until they qualified for portability
benefits (i.e. after two consecutive Plan Years with less than a total of
350 hours of covered employment). Imposing those qualifying requirements on
members suffering from a disability condition that prevents them from working
is not appropriate. Accordingly, the Pension Plan has been amended so that
these members can voluntarily terminate their active status at any time after
becoming disabled and without having to terminate membership in the union.
Voluntary Termination
In the past, members could terminate their active status voluntarily six months
after taking a withdrawal from the union. This voluntary termination option,
which has been a feature of the Plan for many years, has acted as an incentive
for some members to move in and out of the Plan using it as a short-term savings
vehicle and not as a means for accumulating a pension the primary objective
for which the Plan was originally intended. It has also added significantly
to the Plan's administrative workload since the option can be elected at any
time throughout the Plan Year.
The need for the voluntary termination option has been replaced by the requirements
of the Provincial pension legislation, introduced in 1993. The legislation
requires the Plan to offer a member the option to terminate active status
voluntarily if the member has completed less than a total of 350 hours of
covered employment in two consecutive Plan Years.
Since the Plan is required to comply with the legislated voluntary termination
option, the Trustees have decided to discontinue the option to terminate active
status voluntarily six months after withdrawing from the union. This change
became effective July 1, 2002.
Automatic Termination
As one of the measures taken to address the Plan¹s financial difficulties,
termination of active status was made automatic if a member had not earned
any pension in a period of three consecutive Plan Years even if the individual
was a union member. Previously, active status was terminated automatically
after three years with no earned pension only if the member had already left
the union. Initially, this change was due to become effective on July 1, 2001
but was subsequently deferred for a year to July 1, 2002. In view of the concern
expressed that members struggling to find employment covered by the Plan be
accommodated as much as possible, the Trustees have deferred the automatic
termination rule for a further year to July 1, 2003.
Members who have at least 25 hours of covered employment in a Plan Year, but less than the 350 hours needed for a unit of pension, can prevent automatic termination by purchasing a unit of pension with self-payments once in every three-year period.
Please contact the Administration Office if you have any questions about these Plan changes.