Termination From Plan
If you terminate your STF Pension plan membership, you are eligible to receive a termination benefit if you meet the following conditions:
- You are not eligible for retirement; and
- You have terminated your teaching contract or ceased receiving benefits from the Teachers' Long-Term Disability Plan (formerly Income Continuance Plan).
The options you have for receiving your termination benefit depends on how much eligibility service you have in the 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 transfer this amount to your RRSP or receive a taxable lump sum payment.
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 upon termination from the Plan, contact the STRP .
Notice of Change to Canadian Pension Standards Affecting Lump Sum Payouts
On December 1, 2020, a change to Canadian pension standards will be coming into effect that will have a significant effect on members of the STRP who are eligible to receive a lump sum payout of the commuted value of their pension.
The new standard uses longer-term assumptions to calculate lump sum payout values that are more consistent with how the Plan is funded. This will improve the sustainability of the Plan and be more equitable for all members. However, this change will significantly reduce lump sum payout values by as much as 45 percent in some cases.
If you will qualify for termination benefits from the STRP before December 1, 2020 and wish to take a commuted value pay out of your pension calculated using the current standards, please submit your request for an estimate of your termination benefits by October 16, 2020. Download a Termination Options Request form. Any requests received after October 16, 2020 will be calculated using the new standards. Please note that we cannot provide you with an estimate of your commuted value for a future termination date.
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 Holdback
An estimated actuarial valuation as at April 1, 2020 indicates the Saskatchewan Teachers’ Retirement Plan has a solvency ratio of 71.4 percent. In accordance with The Pension Benefits Act, 1992, Saskatchewan, 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 28.6 percent (100 percent – 71.4 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 holdback 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 holdback 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.