Pension Plan Administrators
The conversion of a defined benefit plan to a defined contribution plan is a plan amendment. In accordance with subsection 19(3) of The Pension Benefits Act, 1992, an amendment may not reduce a person's benefit entitlements accrued prior to the effective date of the amendment. The conversion process, therefore, must ensure that the value of an individual's accrued benefit is preserved.
A conversion occurs when accruals under a defined benefit plan cease, and accruals commence under a defined contribution plan. The Pensions Division should be consulted at the time a conversion is being contemplated.
Generally, there are two approaches to converting a defined benefit plan into a defined contribution plan. These are:
On the registration of a plan that includes an identifiable group of members of another plan, the other plan is not to be terminated unless the Superintendent of Pensions determines that the plan should be terminated. It is important to consult with the Pensions Division if this situation is being contemplated.
See the related documents below for more information on the conversion of a defined benefit plan to a defined contribution plan.