Pension plan wind-up

A seller who sponsors a registered pension plan may end it before or after a sale. The meaning and the steps depend on the Act that governs the plan, so a buyer first asks whether the plan is federally or provincially regulated. This entry covers federal and Ontario rules only; check the rules in the province where the business is.

What the Acts say

The federal Pension Benefits Standards Act, 1985 defines winding-up as the distribution of the assets of a pension plan that has been terminated. Under Ontario’s Pension Benefits Act, the employer may wind up the plan, or the administrator in the case of a multi-employer plan, with separate rules for jointly sponsored plans; the Chief Executive Officer may also order a wind up in listed cases. The administrator files a wind up report, and the pension fund stays subject to the Act and the regulations until all its assets have been disbursed.

What to ask

• Whether a wind-up has started, and its effective date.
• Which Act and regulator govern the plan.
• Whether members have received their entitlement statements.

See what happens to the pension or benefits plan and the entry on a registered pension plan.