Grow-in rights (pension)

A buyer who terminates employees that belong to an Ontario pension plan may trigger these rights. A question-and-answer document published by FSRA, the Ontario pension regulator, describes the right as entitling the eligible member to receive the pension beginning on the date the member would have been entitled to an enhanced or unreduced pension had employment or membership continued to that date. See what happens to the pension or benefits plan on a sale.

What triggers them

Section 74(1) applies the section to a person who ceases to be a member on the effective date of an activating event: the wind up of a plan, the employer’s termination of the member’s employment, or other prescribed events, each subject to the effective dates the subsection sets. Under s.74(1.1), termination is not an activating event if it results from wilful misconduct, disobedience or wilful neglect of duty that is not trivial and has not been condoned by the employer, or occurs in other prescribed circumstances.

What the member may receive

A member in Ontario whose age plus years of continuous employment or plan membership meets the combination in s.74(1.3) has the right to receive one of the pensions that subsection describes, including a pension under the plan’s terms beginning at the earlier of the normal retirement date and the date the member would have been entitled to an unreduced pension had the event not occurred and membership continued. Bridging benefits are included for a member with the length of service or membership that s.74(3) sets.

Exceptions to check

Under s.74(1.2), s.74 does not apply to a jointly sponsored pension plan or a multi-employer pension plan while an election under s.74.1 to exclude the plan and its members is in effect. FSRA also notes that the legislation limits the rights of construction employees. This entry covers Ontario only; check the rules where you are.