Responsibilities | Pension Plans
Information for Pension Plan Members

Commutation of Small Vested Benefits
When you terminate your employment, you may have only a small vested benefit in the pension plan.

The PBSA entitles you to receive your benefit entitlement in cash if the commuted value does not exceed 20 % of the Year's Maximum Pensionable Earnings ("Y.M.P.E.") under the Canada Pension Plan for the year of termination (20% of Y.M.P.E. = $8,220 in 2005, $8,100 in 2004, $7,980 in 2003, $7,820 in 2002, $7,660 in 2001, and $7,520 in 2000).

The PBSA also entitles you to receive your benefit entitlement in cash if the monthly pension payable to you at normal retirement would be less than 1/12 of 10 % of Y.M.P.E. (1/12 of 10 % of Y.M.P.E. = $342.50 per month in 2005).

Note that the monthly pension test exception for unlocking only applies to pension benefits still in pension plans. This exception does not apply to benefits that have already been transferred into locked-in RRSPs or life income funds ("LIFs"). Information is provided elsewhere on this site covering the exceptions available for the unlocking of RRSPs and LIFs.

If the commuted value of your pension benefits in the pension plan qualifies under either or both of the above two tests it may be paid from the plan as a cash lump sum, or transferred to a regular (i.e. unlocked) RRSP.

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