Effective May 31, 2010 Manitoba became the first pension regulatory body to make major amendments to their Pension Act & Regulations in respect of members’ benefits in a decade. We will just highlight the major changes:

  • Benefits are now 100% vested to members immediately retroactive to the initial effective date of July 1, 1976. This will increase administration in plans where there is a lot of turnover in the first years of employment. Manitoba now joins Quebec with immediate vesting. Watch for other provinces to reduce their rules as well.
  • The minimum survivor benefit upon retirement has been changed from 66 2/3% spousal pension to a 60% spousal pension to harmonize Manitoba with all the other provincial jurisdictions.
  • A member’s spouse may now waive their right to a pre-retirement death benefit. This will assist families to better allocate their various assets & death benefits among family members. This was not permitted prior to May 31, 2010.
  • The minimum cost rule (often called the 50% rule  because it ensures the member and employer “share”  the value of a pension 50/50 upon termination, death or retirement) has been changed to be effective only for contributory service. Previously all service was permitted to be used in the calculation of the 50% rule which could have reduced excess employee contributions refundable if there were periods of time when a member earned non- contributory pension benefits.
  • The small pension cash out rule has been increased such that if a member’s pension is less than 4% of the Yearly CPP Earnings, or $157 p.m. of pension in 2010, or if the commuted (present) value of the pension is less than 20% of the Yearly CPP Earnings, or $9,440 lump sum in 2010, the benefit is not considered locked-in and is therefore payable in cash.
  • E-mail correspondence with Plan members is now formally accepted by Manitoba. There is also a new Document Retention Policy in place as well.
  • There are numerous other housekeeping changes, but these are the most important ones with respect to members’ benefits and pension plan administration.

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