Ontario Bill 57 – See who it applies to and what they could do
Ontario Bill 57 – Who does it apply to?
Ontario Bill 57 recently amended The Pension Benefits Act to permit unlocking to former members of a pension plan who are non-residents of Canada.
It applies to plan sponsors who:
- Have a pension plan(s) registered in Ontario, or
- Have members who are subject to Ontario pension legislation, even if their plan is registered outside Ontario.
What it means
- This allows a pension plan to pay the commuted value of a deferred pension to former members who are subject to Ontario pension legislation, and who still have assets in the pension plan.
- The former member must be a non-resident of Canada for the purposes of the Income Tax Act (Canada).
- Their spouse, if they have one, must provide a written waiver to any rights they may have in the pension fund.
Amending the plan text
If a sponsor wants to offer this option to their former members they will need to have their plan text amended, unless it already includes this option.
The plan text must be amended by whoever prepared it (e.g., Manulife, advisor, lawyer, etc.) If the plan text was prepared by Manulife, we can help sponsors amend it at their request, subject to a fee for service*. In all other cases, the sponsor must send us a copy of their amended plan text for our files so that we can administer their plan accordingly.
Questions? Contact your Manulife representative.
*Plan sponsors should refer to their Service and Fee Agreement or the quotation that is part of their contract, as applicable, for details on the fee that may apply.