Options
If a member leaves the Plan before they have reached five years' Combined Pensionable Service (CPS), they will not be eligible to collect a MEPP pension at retirement. The member will automatically be sent a Termination Statement outlining their options.
Time Sensitive Considerations
Leaves of Absence
Members have 30 days from the date they leave the Plan to apply to purchase a leave of absence. If a member is already paying for a leave of absence, they have 90 days from the date they leave the Plan to complete that purchase.
Prior Service Purchases
If a member intends to buy prior service, they must submit their application before leaving the Plan. If a member is already making prior service payments, they will have 90 days to complete their buyback purchase.
In either scenario, if the member does not complete the purchase, it will be prorated — only the amount of service they have paid for will be credited.
Leave Pension Contributions with Interest with MEPP
This is a secure option, and contributions will earn interest over time.
Should a member choose this option and re-join the Plan in the future, any new pensionable service they earn will be added to their existing service. Once they reach five years of pensionable service in MEPP (or five years of CPS), they will then be vested and eligible to collect a lifelong pension.
Transfer Pension Benefit to Another Pension Plan
MEPP has transfer agreements with several other provincial and federal public sector pension plans.
If members join an employer who participates in one of those plans, they might be able to transfer their MEPP service to the new plan.
Transfer Your Contributions with Interest to a Registered Retirement Savings Plan (RRSP), with No Taxes Withheld
Contributions with interest can be transferred to an RRSP. No income tax will be withheld from this transfer, and no T4A will be issued.
Receive a Refund of Contributions with Interest
Contributions with interest will be paid to the member by cheque or direct deposit, and income tax will be withheld. After this payment, the member will no longer have a benefit with MEPP.
How much income tax is withheld from the payout?
For members that live in Canada, the amount withheld is based on the table shown here.
| Lump Sum Amount | Federal Income Tax Rate |
|---|---|
| $5,000 or less | 10% |
| More than $5,000 up to $15,000 | 20% |
| More than $15,000 | 30% |
A T4A will be issued with the payment indicating the amount of pension income the member has received and the amount of tax they have paid. The tax withheld will be based only on the value of this payment. When added to the member’s employment income for the year, they might be required to pay additional tax when they file their income tax return. Read more about income taxes and receiving tax slips.
If the mailing address we have on file for a member is outside of Canada when they receive funds from the Plan, the income tax amount withheld will depend on that country's rates.