Disability and pension plans in the private, municipal and university sectors
A supplemental pension plan (also called pension plan) can provide a refund or pension in the event of disability. If it does so, certain conditions apply.
Consult the documents that concern your plan (summary, statement, etc.) to find out if provisions in the event of disability are provided therein. You can
contact your plan administrator for information.
If your plan provides a refund or pension in the event of disability and you meet the conditions to be entitled to it, you must contact your plan administrator to request a refund, a pension or a transfer.
Different definition for the Québec Pension Plan
Even if you are entitled to a refund or pension under your plan in the event of disability, you might not be entitled to a disability pension under the Québec Pension Plan. Each plan, contract or program has its own definition of disability.
Check the conditions that apply to each one to find out what you can receive.
On this page:
Defined-contribution pension plan
Refund
You could be entitled to the refund of the amounts credited to your defined‑contribution pension plan account, if you meet the following two conditions:
You have a disability that reduces your life expectancy.
You are entitled to a pension under the plan.
It is the case, for example, if your active membership in the plan ended.
The refund can be made in one or more instalments.
The refund is taxable. You could pay income taxes at a later time if the amounts can be transferred
directly to an
RRSP or a registered retirement income fund (RRIF). For more information, consult the
Canada Revenue Agency's 
website.
Definition of disability to be entitled to the refund
If applicable, to be entitled to the refund in the event of disability, you must meet the following two conditions:
You have a physical or mental disability.
If your health problems do not affect your ability to work, you cannot be deemed to be disabled.
Your disability reduces your life expectancy.
Reduced life expectancy does not necessarily mean that the reduction must be significant. However, your plan could require that it be.
Your plan could impose stricter conditions.
Transfer to an
LIRA to obtain a refund
If your plan does not provide a refund in the event of disability, you can obtain a refund
from an
LIRA, if you meet the conditions provided in the
LIRA. However, you must
transfer the amounts accrued in your defined-contribution pension plan directly to a locked-in retirement account (LIRA). The transfer can be made if your plan membership ended.
Defined-benefit pension plan or target-benefit pension plan
Refund
You could be entitled to the refund of the amounts credited to your defined‑contribution pension plan account, if you meet the following two conditions:
You have a disability that reduces your life expectancy.
You are entitled to a pension under the plan.
It is the case, for example, if your active membership in the plan ended.
The refund can be made in one or more instalments.
The refund is taxable. You could pay income taxes at a later time if the amounts can be transferred
directly to an
RRSP or a registered retirement income fund (RRIF). For more information, consult the
Canada Revenue Agency's website.
Definition of disability to be entitled to the refund
If applicable, to be entitled to the refund in the event of disability, you must meet the following two conditions:
You have a physical or mental disability.
If your health problems do not affect your ability to work, you cannot be deemed to be disabled.
Your disability reduces your life expectancy.
Reduced life expectancy does not necessarily mean that the reduction must be significant. However, your plan could require that it be.
Your plan could impose stricter conditions.
Transfer to an
LIRA to obtain a refund
If your plan does not provide a refund in the event of disability, you can obtain a refund
from an
LIRA, if you meet the conditions provided in the
LIRA. However, you must
transfer the amounts accrued in your defined-contribution pension plan directly to a locked-in retirement account (LIRA). The transfer can be made if your plan membership ended.
Disability pension
You could receive a disability pension from a defined-benefit pension plan or a target-benefit pension plan.
The value of the disability pension must be at least equal to the value of the benefits if you had not become disabled, which means that the value of the disability pension cannot be lower than the value of the pension to which the person would have been entitled if his or her active membership had ended when he or she became disabled. The amount of the disability may therefore be different than your vested retirement pension.
Definition of disability to be entitled to a disability pension under your plan
If applicable, to be entitled to a disability pension, you must meet the following two conditions:
You have a physical or mental disability.
If your health problems do not affect your ability to work, you cannot be deemed to be disabled.
Your disability requires you, where applicable:
- to stop working for the employer party to the plan;
- to end your active membership in the plan.
Your plan could impose stricter conditions.
Your plan must provide the conditions that must be met to receive a disability pension. It could provide that you have a severe and prolonged disability.
End of your disability
You will still receive a pension when you retire. The amount of the pension could be adjusted, between the dates on which payment of the disability pension began and ended.
For
defined-benefit pension plans, the amount would depend on:
- payments of the disability pension that you received.
For
target-benefit pension plans, the amount would depend on:
- payments of the disability pension that you received;
- the recovery measures that apply;
- the restoration of benefits made;
- the surplus assets used.
Improvement of your state of health
Has your state of health improved? That has no effect on the refund equal to the value of your benefits or the direct transfer of that value to an
RRSP, a registered retirement income fund (RRIF) or an LIRA.
If you are receiving a disability pension under your plan, payment of the pension could end. It is the case if you are no longer deemed to be disabled under the plan, even if you return to work with the employer party to the plan (employer that is a member of the plan).
Returning to work
Your work does not affect the refund of the value of your benefits or the direct transfer of that value to an
RRSP, an
RRIF or an LIRA.
If you return to work and are receiving a disability pension under your plan, payment of the pension could end if you are no longer deemed to be disabled under the plan.
If you are working and payment of your disability pension has ended, you will still receive a retirement pension under your plan when you retire. The amount of the pension could be adjusted, in particular to take into account payments of the disability pension that you received.
Simplified pension plan
Refund
If you have a disability that reduces your life expectancy, you are entitled to the refund of the balance of your locked-in and not locked-in accounts under a simplified pension plan.
To obtain a refund, a medical certificate must be provided to the
financial institution that administers your plan.
The refund is made in a single payment.
The refund is taxable. You could pay income taxes at a later time if the balance of your accounts can be transferred
directly to an
RRSP or to a registered retirement income fund (RRIF). For more information, consult the
Canada Revenue Agency's website.
Definition of disability to be entitled to the refund
To be entitled to the refund of the balance of locked-in and not locked-in accounts in the event of disability, you must meet the following two conditions:
You have a physical or mental disability.
If your health problems do not affect your ability to work, you cannot be deemed to be disabled.
Your disability reduces your life expectancy.
Reduced life expectancy does not necessarily mean that the reduction must be significant.
The financial institution
cannot impose other conditions.
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