If you leave the Plan before you have reached five years' Combined Pensionable Service (CPS), you will not be eligible to collect a MEPP pension at retirement. You will automatically be sent a Termination Statement outlining your options.
Fewer Than Five Years of Service
Your Options
Time Sensitive Considerations
Leaves of Absence
You have 30 days from the date you leave the Plan to apply to purchase a leave of absence. If you are already paying for a leave of absence, you have 90 days from the date you leave the Plan to complete that purchase.
Prior Service Purchases
If you intend to buy prior service, you must submit your application to do so before you leave the Plan. If you are already making prior service payments, you will have 90 days to complete your buyback purchase.
In either scenario, if you do not complete the purchase it will be prorated — only the amount of service you have paid for will be credited.
Leave Your Pension Contributions with Interest with MEPP
This is a secure option, and your contributions will earn interest over time.
Should you re-join the Plan, any new pensionable service you earn will be added to your existing service. Once you reach five years of pensionable service in MEPP (or five years of CPS) you will then be vested and eligible to collect a lifelong pension.
Receive a Refund of Your Contributions with Interest
Your contributions with interest will be paid to you by cheque or direct deposit, and income tax will be withheld. After this payment, you will no longer have a benefit with MEPP.
How much income tax is withheld from my payout?
If you 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 your payment indicating the amount of pension income you have received and the amount of tax you have paid. The tax withheld will be based only on the value of this payment. When added to your employment income for the year, you might be required to pay additional tax when you file your income tax return. Read more about income taxes and receiving tax slips.
If the mailing address we have on file for you is outside of Canada when you receive funds from the Plan, the income tax amount withheld will depend on that country's rates.