Coast-to-coast transfers

September 12, 2013

This is part 2 of a series on transferring credit based on the types of scenarios we see at Teachers'. Read part 1 here.

Simon taught elementary school in British Columbia for five years before he decided it was time to move back to Ontario to be closer to his family.

While living and working in British Columbia, he was a member of the British Columbia Teachers' Pension Plan. Now that he's working for the Rainbow District School Board in Espanola, Ont., he automatically contributes to the Ontario Teachers' Pension Plan.

Simon decides to look into transferring his credit from BC's pension plan to OTPP. He knows that consolidating pension credit into one plan will allow him to qualify for an unreduced pension sooner than if he takes a piece meal approach. He calls OTPP and speaks with a Pension Benefits Specialist (PBS).

During the conversation, the PBS tells Simon that there is no time limit on transferring credit from one provincial teachers' plan to another, as long as he completes the transfer before he retires.

While there is no time constraint, he still needs to take some factors into consideration though:

  1. Not all pension plans are created equal. Plan differences such as early retirement provisions, benefit formulas, inflation adjustments and differences in salary can make the actuarial value of a pension differ from plan to plan. Simon may have to pay the difference in credit.
  2. Consider where you will be in the longterm. Simon should be certain that he intends to spend the rest of his career in Ontario. Transferring credit into Ontario, and then returning to BC could prove to be complicated and costly.

After weighing his options, Simon decides to proceed with getting the transfer cost, including any potential shortfall amounts. Requesting this cost doesn't lock him into a transfer, but he knows he'll be making a fully-informed decision.

A few weeks later the PBS sends Simon the cost estimate. The estimate is valid for 60 days. Simon decides to go ahead with the transfer and pays for the shortfall in a lump sum.