Terminating Your Contract
If you’ve resigned or your contract has been terminated, your active participation in the plans ends and you must decide what to do with your termination benefit. Your options are outlined below.
The benefits available to you at termination depend on your age and whether you have enough pensionable service in the plan to be eligible to start collecting a pension. Depending on your circumstances, the options available to you are:
- keep your funds in the plans,
- leave the plan and transfer your benefit to another pension plan with which ATRF has a reciprocal transfer agreement, or
- withdraw your funds.
Keeping Your Funds in the Plan
If you leave your funds in the ATRF plans:
- You may accrue additional benefits if you start working for a participating employer again in the future or
- If you have enough service to be eligible for a pension (determine your status):
- Your pension will be deferred until the month following your 55th birthday (the earliest date a pension can start being collected). Cost of living adjustments (COLA) will be granted during the deferral period, and if you select this option you should contact ATRF four months before your 55th birthday to apply for your pension.
- If you are over age 55 and have enough service to be eligible for a pension, you can immediately apply to start receiving your retirement. Note that once you have reached this point, you are no longer eligible to apply to withdraw your commuted value from the plan. (get more details about commuted value here)
Transferring Service to Another Plan
If you are planning on teaching in another province or changing careers but working for an organization that has a pension plan with a reciprocal transfer agreement, you may be eligible to transfer the pensionable service and funds that you’ve accumulated in our plans to your new registered pension plan. Deadlines for transfer may apply. More information can be found on the Transferring Service page.
Withdrawing Your Funds (Leaving the Plan)
When you resign from your job or your contract is terminated, you have the option of receiving a termination benefit.
If You Don’t Have Enough Service to be Eligible for a Pension
Your termination benefit is equal to your contributions with interest and may be:
- transferred directly to a Registered Retirement Savings Plan (RRSP), with no income tax deducted. This direct transfer will not affect your RRSP deduction room, or
- paid to you in cash, with income tax deducted.
If You Have Enough Service to be Eligible for a Pension
The benefit payable for pensionable service before September 1, 1992, is equal to your contributions with interest and may be:
- transferred directly to an RRSP, with no income tax deducted. This direct transfer will not affect your RRSP deduction room, or
- paid to you in cash, with income tax deducted.
The benefit payable for pensionable service after August 31, 1992 is the greater of:
- your contributions with interest, or
- the commuted value of your pension.
This benefit must be transferred directly to a Locked-In Retirement Account (LIRA) up to the maximum permitted in accordance with the Income Tax Act. LIRAs are restricted RRSPs that require that funds be used to provide income on or after age 50 but, at the latest, by the end of the calendar year in which you turn age 71. Most financial institutions offer LIRAs. A list of these financial institutions is available on the Employment Pensions website.
Income tax will not be deducted from the direct transfer to your LIRA, and it will not affect your RRSP deduction room. Any benefit above the maximum permitted to be transferred to a LIRA in accordance with the Income Tax Act will be paid to you in cash, with income tax deducted according to the withholding rates for lump-sum payments.
There are a number of things to consider when choosing this option. Please refer to Removing Your Funds from the Plan for a detailed overview of the benefits and drawbacks.
Termination Benefit Application Process
Step 1: Determine if you are eligible to withdraw your funds.
To be eligible, you must:
- have already terminated your teaching contract or notified your employer you will be terminating your teaching contract, and
- apply to ATRF before any new teaching contract with an ATRF employer begins.
If you have enough service to be eligible for a pension, the following eligibility rules also apply:
- your contract termination date must be effective before you turn age 55, and
- your application must be received by ATRF before you turn age 55.
Step 2: Apply to withdraw your funds.
- Submit a completed Employee Termination Notice or an online application in MyPension to ATRF in accordance with the eligibility criteria above.
- Provide your acceptable proof of age document to ATRF (e.g. driver’s license or passport).
Step 3: ATRF will calculate your termination benefit.
ATRF will determine your eligibility and prepare your termination benefit package after:
- Your properly completed application and proof of age document are received, and
- ATRF has confirmed your termination date and final service, salary, and contribution information with your former employer.
This process can take two to four months. The termination benefit will be based on your records with ATRF at the time you apply and applicable legislation in effect at that time.
Step 4: Receive Your Termination Benefit Package.
You will receive your Termination Benefit Package that includes:
- Your final termination benefit calculation, and
- The following, which must be signed and returned to ATRF to receive the payment: an ATRF Termination Benefit Acceptance form, and Canada Revenue Agency form T2151 Direct Transfer of a Single Amount (if applicable).
Step 5: Withdraw Your Funds.
When you withdraw your funds, you will no longer be entitled to any further benefit from the plan, and the service that your termination benefit represented is no longer to your credit.
You may be eligible to purchase that service if you return to working in a position where you become a contributing, active member of ATRF or are accruing pensionable service as a disabled member. The cost of purchasing this pensionable service equals the value of the increase in pension benefit as calculated on the date of application, which may be greater than the amount of your termination benefit.