Partial wind-up (pension plan)

A buyer or seller can meet a partial wind-up in the history of a plan where an earlier sale or closure ended the plan membership of a group of employees while the plan carried on for others. This entry covers Ontario only; check the rules where you are.

What Ontario’s Act says

Sections 77.1 to 77.9 are transitional. Under s.77.1, a plan may be wound up in part if the effective date of the partial wind up precedes the date that section came into force, and cannot be if the effective date would fall on or after it. The Act records new sections, beginning with s.77.0.1, for a partial wind up of the part of a plan that provides variable life benefits, to be added on a day to be named. Within that window, s.77.3(1) lets the Chief Executive Officer order a partial wind-up in listed cases, including if a significant number of members cease to be employed by the employer because all or part of its business is discontinued or reorganized, if all or a significant portion of the business at a specific location is discontinued, or if part of the business or its assets is sold and the acquirer does not provide a pension plan for the members who become its employees. For a defined benefit plan wound up in part with insufficient assets, Regulation 909 s.35 requires the wind up report to be prepared under section 30 as if the plan were being wholly wound up. Section 77.10 repeals ss.77.1 to 77.9 on a day to be named, and the Act records other amendments to come into force on a day to be named, so read its current text.

What to ask

• Whether a partial wind-up has been ordered, and its effective date.
• Whether the buyer will provide a plan for the members who transfer.
• Which members the sale would affect.

See what happens to the pension or benefits plan and the entry on a full pension plan wind-up.