Eligibility and Membership

Revised January 2002

The main objective of the Pension Benefits Act is to safeguard employees' rights to benefits promised under private pension plans. Over the years, the rights of employees to obtain information have increased. There is now more protection for the spouse or common-law partner of a contributing member. In addition, employees who leave their jobs now have new options regarding transfers of their pension credits.

ELIGIBILITY

All employees must be eligible to join after completing no more than two years of service.

MEMBERSHIP

Full-time employees

Full-time employees, hired by an employer who operates a company pension plan, are required to become a member of the pension plan after completing no greater than two years of employment service.

EMPLOYEES OTHER THAN FULL-TIME

Employees other than full-time (part-time, seasonal, casual, and temporary) are required to become a member of the pension plan after;

1. Completing no greater than two years of employment service, and
2. Earning at least 25% of the Year's Maximum Pensionable Earnings YMPE, (as determined each year by the Canada Pension Plan) in each of two consecutive calendar years of service.

Who is exempt from becoming a member of a company pension plan?

The pension plan may exempt the following groups, and may allow them to join voluntarily upon meeting eligibility requirements.

1. Students who are attending a recognized educational institution on a substantially full-time basis.
2. Employees hired prior to January 1, 1984, or the effective date of the pension plan whichever is later.
3. Members of certain religious groups whose articles of faith prohibit them from joining a pension plan.
4. Plan members receiving a pension income who return to work for the same employer or another employer covered by the same pension plan.

Does this mean my employer must now set up a pension plan?

No. This legislation only applies to an employer who already has a pension plan in place.

JOINING EARLIER THAN 2 YEARS

The two year service requirement for eligibility and membership is a legislative minimum, but if the plan provides for a shorter service condition or immediate eligibility and membership, the plan provision will apply.

Examples

1. An employee other than full-time, hired January 1, 1984, who earns more than 25% of the YMPE for two consecutive calendar years, i.e. Jan - Dec/84 through Dec. 31, 1985, will be required to become a member of the plan on January 1, 1986.
   
2. An employee other than full-time, hired January 1, 1984, who earns more than 25% of the YMPE for the calendar year of 1984, but not for the calendar year of 1985, is eligible to become a member of the plan on January 1, 1986, voluntarily.  However, the employee will not be required to become a member of the plan until such time as they earn 25% of the YMPE during two consecutive calendar years.
   
3. All employees, regardless of income levels and regardless of when they were hired, must have the option of joining the plan voluntarily, subject to a maximum eligibility requirement of two years of service after January 1, 1984.