Thursday, August 5, 2010

Canadian Pension Protection (Ontario) on first $1000 per month

The Province of Ontario Canada has protection on the first $1000 of pension that is impacted by bankruptcy. The protection is provided through the Financial Services Commission of Ontario (FSCO)from the Pension Benefits Guarantee Fund (PBGF). To be eligible for the pension protection, you have to have worked in Ontario at some time in your career. The pension protection applies regardless of where you reside now.

The amount is determined based on the time you spent in Ontario as a percentage of your total service used to determine the pension. At this point it is not clear if the total service is only computed based on service in Canada used to calculate the pension, or if it includes foreign service as well.

This protection can help increase the pension received after September and the approach will provide all Nortel Canadian retirees with Ontario service a bit more in their monthly income than just relying on the remainder of the trust fund.

I have written to the FSCO requesting clarification of this point. I tried calling them at their number 416-250-7250 (1-800-668-0128 in Canada only) but was put on hold for over half an hour (long distance). I hope they call or write back to me. It would be nice to know what impacts all these things have on us.

It feels like we are being kept in the dark, not on purpose perhaps, but waiting until October to find out just doesn't cut it with me. I want to know up front, and I am sure most everyone else does as well. After all it's our money in the pension trust fund, and why we weren't kept better informed about it is suspicious and a mystery to me.

It's a shame that there isn't a Canadian Federal protection program of the sort in Ontario to help retirees who worked solely in other Provinces. I just don't understand the Canadian Government's reluctance and indifference.

Also the $1000 limit in the Ontario fund seems low in today's terms. That number hasn't changed for many years. But it's certainly better than zero.

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