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Ceasing Employment

Life Insurance Conversion

Employees who cease to be employed may convert the amount of insurance at termination, or any lesser amount if they so choose, to an individual policy within 60 days of termination. Conversion allows employees to continue insurance privately (at private rates) without providing evidence of insurability. For information on converting insurance or to apply for conversion, please contact Deborah Capek at 204-297-6224 or email deborah@capekfinancial.ca.

Life Insurance Waiver of Contributions

If a member ceases to be an employee due to ill health or injury or is in receipt of a disability pension, he or she may apply to have Life Insurance continued without making any further contributions. To be approved, the member must be totally and permanently disabled in the opinion of The Insurance Company and proof of continuing disability must be submitted as requested. If approved, Life Insurance will continue in force as if the member had remained employed until the earlier of recovery, death or age 65. A person who is on a “Waiver of Contributions” would be eligible for retirement insurance at age 65. Application for a “Waiver of Contributions” must be made within 365 days after a member ceases to be an employee. Employees would generally apply through the employer, and former employees would generally apply through the Board.

When a member leaves employment, the process is as follows:

  1. When all final monies owing to you have been paid out by your employer (final pay, vacation pay, etc.), your employer will send us notification of your termination.
  2. When we receive this notification we will put together a package for you detailing the value of your pension and what your options are regarding it. The package including information and forms will be sent to your home address within 60 days of the date we receive employer notification.
  3. You would then complete the enclosed option forms and return to us for processing.

The options you will have to elect from are as follows:

  1. Transfer funds to a new employer’s registered pension plan if they will accept the transfer,
  2. Transfer locked-in funds to a LIRA, LIF or to the Civil Service Superannuation Fund Money Purchase Plan,
  3. Transfer non locked-in funds to an RRSP, CSSF Money Purchase Plan or take as a cash refund, or
  4. Deferred pension (leave the funds with the Superannuation Board to collect a pension at a later date) – this option may or may not be available depending on what the final value of your pension is calculated to be.

Options Upon Termination

Deferred Pension

A member’s pension is considered deferred if he or she is no longer an employee or active member in the plan, and is either under age 55, or is at least age 55 but has not applied to commence the pension. Cost-of-living increases applied to deferred pensions are the same as increases granted on pensions in payment.

Reinstatement or Transfer to Another Pension Plan

Reinstatement                                                                             

Reinstatement is the option of combining a prior Fund account with a new Fund account. Reinstatement results in the combination of the two pensions, which is less complicated and generally provides for a higher gross pension income but is also less flexible. A member with a deferred pension may reinstate the pension if he or she again becomes an employee within three years of having ceased to be an employee and applies for reinstatement within two years of again becoming an employee. A member cannot reinstate a pension if those benefits have been refunded or transferred, or the excess contributions have been removed from the plan or Money Purchase Plan. If a member has two or more pensions (accounts) in the plan, qualifying service for each pension includes the total qualifying service from all pension accounts, whether reinstated or not.

Transfer to Another Pension Plan                                                           

You can generally transfer your pension to another employer pension plan at anytime before the pension has commenced if that plan will accept the transfer. There are no deadlines for transferring your pension benefits under this option.

Reciprocal Transfer Agreements (RTA’s)                                                    

These agreements may provide greater benefits than transfers where no agreement exists. The Board has entered into Reciprocal Transfer Agreements with many pension plans in Manitoba and across Canada. To be eligible, you must be a member of a pension plan that we have a transfer agreement with and apply within any timelines in the agreement. You may not be eligible for such a transfer if you removed any funds from the pension plan or Money Purchase Plan, or commenced the pension or annuity.

To apply, you would first complete the Option form requesting additional information. You would also need to complete a form available from your new pension plan administrator. This form provides written consent for the two plans to exchange your information. This would not obligate you to transfer your pension. You would complete an actual transfer application once you have received the necessary information from both plans on which you can base your decision. Please contact the Board office or see our website for further information.

Transfer to Personal Plan or Refund

Transfer values are made up of one or more of locked-in funds, non locked-in funds, excess contributions, and Registered Pension Excess on Transfers.

  • Locked-in Funds can be transferred to a Locked-in Retirement Account (LIRA), Life Income Fund (LIF) if age 55 or older, or a CSSB Money Purchase Plan locked-in account. Consent of spouse/common-law partner is required, if applicable, for funds transferred to a LIF.
  • Non-Locked in Funds and Excess Contributions can be transferred to an RRSP, a CSSB Money Purchase Plan non-locked-in account, or paid as cash.
  • Registered Pension Excess on Transfers must be paid as cash.

Cash payments are subject to income tax withholding.

Transfer amounts tend to increase with time, but may decrease from time-to-time due to changes such as interest rates or legislated calculation methods.

Defaults If No Election Made

If completed option forms are not returned to us within 120 days of the date of the termination option letter, the pension will remain as a deferred pension and any excess contributions will be transferred to the Money Purchase Plan. This will not change any of the options available, however the recalculated value of a later transfer could increase or decrease due to changes such as interest rates or legislated calculation methods.

If you’ve left employment and are considering your pension options, you may be trying to decide between collecting a monthly pension — either now if you’re eligible or later if you’re not — and transferring the lump sum value of your pension out of the plan.

These are both great options with their own advantages, and there’s no one option that’s right for everyone. Your decision should be based on personal factors such as your personality, relationship status, investment knowledge and comfort level, and your overall financial situation. CSSB staff are available to help you understand these options but can’t tell you which is the best for you. However, there are some things we suggest you consider when making your decision.

Some Reasons Why the Monthly Pension May Suit You Better

  1. Reliable Income

A monthly pension from the plan would be paid to you for your lifetime, no matter how long you live. If you have a spouse or common law partner and elect a pension type that continues to that person after your death, that pension would be paid for the survivor’s lifetime, no matter how long he or she lives.

The amount of pension you will receive each month is not affected by the fluctuations in the financial markets. You can budget each month based on a steady and reliable income, and you don’t need to worry about watching investment performance or making adjustments to your lifestyle as markets change.

  1. Security

The pension plan is a long term undertaking that benefits from having a large number of members and an expectation that it will continue to operate indefinitely.

Because of the size of the pension fund, the plan can take advantage of investment opportunities which individuals likely can’t, and it can invest at significantly lower costs. The plan can also diversify and not be overly concerned with market cycles or life cycles of members.

The plan does not operate for profit, and is sponsored by the Province of Manitoba. Its investments are managed by a team of dedicated professionals and its financial health is regularly monitored by the Board and its actuary.

  1. Access to Retiree Group Insurance (if participating)

If you participate in the Public Service Group Insurance Fund at retirement and immediately commence your pension, you can continue your group insurance coverage into retirement without providing medical evidence. Group insurance coverage may provide access to life insurance coverage that is more affordable than at private rates or may not be available to you for health reasons.

  1. Access to Retiree Health Insurance

Monthly pension recipients may be eligible to participate in retiree health insurance coverage through Manitoba Blue Cross or the Manitoba Association of Retired Government Employees (administered by Johnson Inc.). This may provide access to better or more affordable health care coverage than can be obtained otherwise.

Some Reasons Why the Lump Sum Option May Suit You Better

  1. You have a shortened life expectancy

The pension plan is designed to pay pensions for the life of the member, and with a survivor pension, pay a surviving spouse or partner for his or her lifetime after the pensioner dies. However, if you have a significantly shortened life expectancy, the lump sum option may provide a better overall benefit, greater flexibility in timing of income, and higher benefits for your spouse/partner or estate after your death.

  1. You have expertise in investing or want to increase your control over your money

When you elect the lump sum option, you’re increasing your personal risk in exchange for possible potential rewards. This may make sense depending on your level of comfort with investments, your faith in your financial advisor, your other sources of income, or anticipated changes in your cash flow needs over time.

How Do You Decide?

If you’re uncertain about whether to elect a monthly pension or remove your funds from the plan, the first thing you should do is make sure you fully understand these options and what they mean for you. The staff at CSSB is here to help answer your questions, either by phone (204-946-3200 or toll free in Canada at 1-800-432-5134) or by email at askus@cssb.mb.ca.

You also need to look at your overall situation, including your finances, your desired lifestyle, your family situation, etc. You may want to seek the services of a professional financial advisor to help you with this review. A note of caution though…be careful of possible bias in any advice received. Advice from an accountant or financial analyst who charges only for his or her services may differ from that of someone who is being paid a commission for getting you to make certain investments.

You may want to contact your employer to determine if they offer assistance such as financial planning through an Employee Assistance Program (EAP program). You should also find out about any employer-sponsored benefits they may provide on termination and whether those benefits would be impacted by your decision.

In Closing…

This information should not be construed as personal advice. It is general in nature and is not exhaustive, but is intended to point out some information that may be useful in making your decision.

The Civil Service Superannuation Fund is comprised of a number of participating employers. If you previously contributed and have re-entered the Plan, you may be eligible to reinstate your prior account. Reinstatement is the option of combining pensionable service from a prior Fund account into a new Fund account, which allows the pension for the prior period to be determined including the salary in the new account. Previously accumulated pensionable service can be reinstated if:

  • you did not withdraw or transfer any portion of the pension benefits for that service;
  • you re-enter the Plan within three years of leaving; and
  • you apply within two years of re-entering the Plan.

Note: If you transferred pension benefits in respect of a prior period because you were required under the Act to do so, you may be eligible to reinstate that service (subject to the applicable time deadlines), if you repay any amount refunded (if applicable) plus whatever amount is necessary to reinstate the account.

Participating Employers as at November 9, 2018:

  • Addictions Foundation of Manitoba
  • Assiniboine Community College
  • Child and Family All Nations Coordinated Response Network Inc.
  • Civil Service Superannuation Board
  • Communities Economic Development Fund
  • Council on Post-Secondary Education
  • Crown Corporations Council
  • CUPE Support Workers
  • Dairy Farmers of Manitoba
  • Economic Innovation & Technology Council
  • Efficiency Manitoba Inc.
  • Food Development Centre
  • Hams Marketing Co-op Inc.
  • Horizon Lab Ltd
  • Industrial Technology Centre
  • Lakeview Helca Resort
  • Manitoba Agricultural Services Corporation
  • Manitoba Agricultural Services Corporation – Crop Inspectors
  • Manitoba Arts Council
  • Manitoba Centennial Centre Corporation
  • Manitoba Chicken Producers
  • Manitoba Diagnostic Services
  • Manitoba Film & Sound
  • Manitoba Floodway Expansion Authority
  • Manitoba Gaming Control Commission
  • Manitoba Government & General Employees’ Union
  • Manitoba Health Research Council
  • Manitoba Horse Racing Commission
  • Manitoba Housing Authority
  • Manitoba Hydro
  • Manitoba Hydro Utilities Services
  • Manitoba Liquor & Lotteries Corporation
  • Manitoba Public Insurance Corporation
  • Manitoba Pork Council
  • Manitoba Turkey Producers
  • Province of Manitoba – Civil Service
  • Red River College
  • Regional Health Authorities
  • Interlake-Eastern Regional Health Authority
  • Northern Regional Health Authority
  • Prairie Mountain Health
  • Southern Health-Santé Sud
  • Winnipeg Regional Health Authority
  • Sport Manitoba In.
  • Teachers Retirement Allowances Fund
  • Teranet Manitoba LP
  • The Legal Aid Services Society
  • Travel Manitoba
  • University College of the North
  • Venture Manitoba Tours Ltd.

Upon termination, members may leave their pension benefits with the CSSB as a deferred pension until the member is eligible to receive a monthly pension.

A member’s pension is considered deferred if he or she is no longer an employee or active member in the plan, and is either under age 55, or is at least age 55 but has not applied to commence the pension. Cost-of-living increases applied to deferred pensions are the same as increases granted on pensions in payment.

Death

If a member with a deferred pension dies before the pension has commenced, his or her eligible spouse or common-law partner would be entitled to an immediate lifetime pension with a value that is equal to or greater than the member’s transfer value. If at the time of death, the member had no spouse or common-law partner, or the member was living separate and apart from a spouse or common-law partner by reason of a breakdown in the relationship or a spouse or common-law partner had waived his or her entitlement to the pension, pension benefits would be paid to the deferred member’s estate unless the member has made a beneficiary designation in compliance with The Beneficiary Designation Act.

Disability

A member with a deferred pension who has ten or more years of qualifying service can apply for a disability pension if he or she becomes permanently disabled before age 55.

Reinstatement

Reinstatement is the option of combining a prior Fund account with a new Fund account. This allows the pension for the prior period to be redetermined including the salary in the new account. A terminated member may be eligible to reinstate prior service if he or she again becomes an active member of the Fund within three years of having ceased to be an employee and applies for reinstatement within two years of again becoming an active member. A member cannot reinstate prior service if any of the benefits for the prior Fund account have been refunded or transferred, or any excess contributions from the prior Fund account have been removed from the plan or the Money Purchase Plan. However, where a prior benefit was required to be removed under the small benefit unlocking provision, the member may be eligible to reinstate that pension if the original benefit amount plus interest is repaid and the necessary timelines are met.

Retirement

The pension plan allows a retirement date to be any day of the year. A member can retire if he or she is at least age 55, is no longer an employee in the plan, and has submitted a Notice of Retirement (CSSB form # RFA) to the Board.

A Notice of Retirement for a deferred pension must be submitted to the Board on or before the retirement date. The retirement date for a deferred pension is the same as the commencement date. Deferred pensions are not payable prior to the date the Board receives a Notice of Retirement and are not paid retroactively.

Deferred pensions do not commence automatically when a member becomes eligible. To receive the pension, a member must submit a completed Notice of Retirement (prescribed form available from the Board) to the Board office up to six months prior to the pension commencement date.

Transfer

A member can transfer his or her deferred pension benefits out of the plan at any time.

Frequently Asked Questions – Ceasing Employment

The transfer value is the present value of future benefits as determined by the Fund’s Actuary. The transfer value calculation takes into account the amount of the pension benefit, how far away you are from commencing the pension, your age, and actuarial assumptions regarding mortality and interest rates.

See further information on transfer values.

Based on your age and pension benefit accrued at the time of the calculation of your transfer value, the Income Tax Act and Regulations have formulas to determine the maximum value that is eligible for transfer from a pension plan on a tax deferred basis. If the transfer value of your pension is greater than this maximum value, the amount in excess cannot be transferred directly to an RRSP or LIRA and must be paid in cash less applicable withholding tax.

You will need to claim this excess as a refund from the pension plan in the year it is paid. A T4A will be issued at the time the refund is paid.  You should keep this form with your income tax documents.

The CSSB will not accept a copy of your CRA assessment notice as proof that you have RRSP room available for transferring funds. If you have RRSP room and you intend to contribute your registered pension excess or excess contributions to an RRSP, you could complete a Request to Reduce Tax Deductions at Source for Year (T1213) form available from the CRA website. If approved, CRA will provide you with a letter authorizing payment with less or no income tax deducted. The Board office would require a copy of that letter so that we can reduce the tax withholding as authorized. It will then be your responsibility to deposit the funds in your RRSP.

Please ensure that the Employer/Payer is listed as “Civil Service Superannuation Fund”, as the taxable cash payment is being made from the pension plan and not your employer. We will not accept an authorization letter that shows the employer as payer.

If you wish to pursue this with CRA, you should make an application as soon as possible as it may take some time before you receive your letter of approval or denial from CRA. No extensions will be granted if the CRA letter is not received prior to the deadline for submitting completed forms and documents. Once you receive your letter from CRA, please forward a copy of the letter along with your termination option form and appropriate documents. The cash portion of your entitlement would be paid to you directly and you would then be responsible for depositing it into an RRSP.

If you previously contributed and have re-entered the Plan, you may be eligible to reinstate your prior account. Reinstatement is the option of combining pensionable service from a prior Fund account into a new Fund account, which allows the pension for the prior period to be determined including the salary in the new account.

Previously accumulated pensionable service can be reinstated if:

  • you did not withdraw or transfer any portion of the pension benefits for that service;
  • you re-enter the Plan within three years of leaving; and
  • you apply within two years of re-entering the Plan.

Note: If you transferred pension benefits in respect of a prior period because you were required under the Act to do so, you may be eligible to reinstate that service (subject to the applicable time deadlines), if you repay any amount refunded (if applicable) plus whatever amount is necessary to reinstate the account.

Contact the Board office to determine if you are eligible to reinstate prior service.

You may commence your deferred pension at any time after age 55. Within six months prior to the date you want to commence your pension, you can either complete your retirement options online or request a retirement package from the Board office.