Termination From Plan
A teacher may only terminate from the Plan and receive a refund or transfer the commuted value of their STRP pension, if the following requirements are met:
- The teacher is not eligible for retirement; and
- The teacher has terminated their teaching contract or ceased receiving benefits from the Income Continuance Plan.
There is a four-month waiting period from the later of the date the teacher last taught (including substitute service), was under contract or was receiving ICP benefits, to the date the teacher may transfer funds or receive a refund from STRP.
Less Than 10 Months of Eligibility Service
If you have less than 10 months of eligibility service, you are entitled to a refund of your teacher contributions plus interest. You may also transfer this amount to your RRSP.
10 Months or More of Eligibility Service
If you have 10 or more months of eligibility service, and your benefits are not locked in, you have the option to:
- Receive a refund of your teacher contributions plus interest.
- Leave your benefits in the Plan and start your pension when you are eligible to retire.
- Transfer the commuted value of your pension benefit to a locked-in retirement account, or another registered pension plan that agrees to administer the funds in accordance with the STRP Locking-in Agreement.
- Receive a refund of the amount determined under the 50 percent excess test, if any, and leave the remainder of your benefit in the Plan.
If you have 10 or more months of eligibility service and your benefits are locked in, you have the same options as stated above, except you are not eligible for a refund of your teacher contributions plus interest (option 1).
For more information about the options available to you, contact the STRP when you decide to terminate from the Plan.
Reinstatement of Service
A teacher may reinstate the service for which a refund of teacher contributions and interest was received by repaying the amount of the refund with interest calculated at the rate earned by the pension fund. The teacher can repay the complete refund and associated interest or repay the portion of any year to which the refund applied.
If a transfer of the commuted value occurs, then the teacher has no further entitlements under the Plan and no right of reinstatement.
Transfer Deficiency Hold Back
The actuarial valuation as at July 1, 2017, indicates the Saskatchewan Teachers’ Retirement Plan has a solvency ratio of 72.1 percent. In accordance with The Pension Benefits Act, 1992, and Section 28 of its regulations, if a valuation reveals a solvency ratio of less than 100 percent, a portion of the benefit payment payable upon termination from the Plan must be held back. This is called a transfer deficiency. The amount of the transfer deficiency held back will be 27.9 percent (100 percent - 72.1 percent) of the payment calculated at the final payout date. The amount held back will be paid out, including interest, at the end of the five-year period following the date of the termination payment, or sooner, if the Plan becomes fully solvent before then.
If the transfer deficiency hold back dollar amount is less than five percent of the year’s maximum pensionable earnings (YMPE), the entire payment can be paid out. The YMPE is changed annually by the Canada Revenue Agency.
Please note that the transfer deficiency hold back does not apply to the following payments:
- Refund of member contributions.
- Refund of the 50 percent excess contributions.
- A pension benefit that is payable as a small benefit.