Multi-employer pension plan (MEPP)

A buyer may meet this plan when the target’s staff are covered by an agreement that requires contributions to a shared fund, so the business contributes alongside other employers. See what happens to the pension or benefits plan on a sale, and the pension plan administrator entry for who runs such a plan.

How the statutes describe it

• Ontario: a plan established and maintained for employees of two or more employers who contribute, or for whom contributions are made, to a pension fund under an agreement, statute or municipal by-law, providing a benefit determined by service with one or more of them. Subject to exceptions in section 1(4).
• Federal: a plan organized and administered for employees of two or more employers whose contributions are set by an agreement among them, a collective agreement, statute or regulation, if its pension benefits are determined by periods of employment with any or all of them. The definition excludes certain plans whose members work for incorporated affiliates.
• CRA: its registered pension plan glossary describes a multi-employer plan by a limit on how much of the active membership works for one employer or related group.

What to ask

Ask which plan the target contributes to, under which agreement, and what the plan documents say about a participating employer’s withdrawal. Ontario’s Act requires those documents to specify the consequences, if any, of withdrawal. This entry covers Ontario and federal law; check the rules where you are.