An employer may establish a
pension plan for all of its employees or just for certain classes of employees. A class of
employees includes the following:
- salaried employees
- hourly employees
- unionized employees
- non-unionized employees
- supervisory employees
- management employees
- executive employees
- corporate officers
- significant shareholders
A class cannot be made up of a specific or named
individual. If the employer wants to provide one particular person with pension benefits,
a separate single-member plan (often called an Individual Pension Plan or IPP) may be
established.
The Pension Benefits Act does not make membership
mandatory. However, pension plan membership is often compulsory, as a requirement of
employment. If the plan is mandatory, employees cannot choose whether or not to be a
member of the plan.
The Act sets out the criteria under which employees of a
class covered by a plan become eligible to join the plan. If you are a full-time employee,
you are eligible to join your employer's pension plan after 24 months of continuous
service.
If you are a part-time employee, you are eligible to join
your employer's pension plan after 24 months of continuous service provided you meet one
of the following requirements, as provided by your plan's
provisions:
- 700 hours of work for the employer, or
- earnings of at least 35 per cent of the Year's Maximum
Pensionable Earnings (YMPE),
in each of the two consecutive calendar years before
joining the plan.
You may become eligible for membership earlier if the plan
permits.
