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Portability of Pensions Act amended

The Portability of Pensions Act, the legislation which governs transfers between Newfoundland public sector pension plans, has been amended to provide for transfers on an actuarial cost basis. Previously, the cost to transfer pensionable service was calculated by the twice contributions method based on the employee's starting salary in the importing plan.

This cost was offset by the amount of employer and employee contributions and interest transferred from the exporting plan. Under the new rules the amount required by the importing plan and the amount available from the exporting plan will be calculated on an actuarial basis. Pension plan members who apply to transfer service prior to January 1, 2011, will be provided with estimates under the new actuarial cost method and the twice contributions method and may avail of whichever method is more beneficial.

Effective January 1, 2011, all pension transfers will be processed on the new actuarial cost basis. Additional information on the portability changes may be found here or by calling the Benefits and Pensions Office at 864-7406.

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