If you belong to a defined benefit pension plan in Ontario, some of your benefits may be protected if your employer goes bankrupt and they don’t have enough in the pension plan to pay your benefits.

How much of my benefits are covered by the PBGF?

Generally speaking, the PBGF works with the assets in the pension plan to guarantee the first $1,500 of your monthly benefits.

Example #1
Your monthly benefit is $1,500 or less

Your monthly benefit is $1,400. The pension plan has enough assets to pay 70% of those benefits. 

Your entire monthly benefit is guaranteed because it’s less than $1,500:

  • $980 would come from the assets in the pension plan (70% x $1,400)
  • $420 would come from the PBGF

Total monthly benefit: $1,400
 

Example #2
Your monthly benefit is more than $1,500

Your monthly benefit is $3,000. The pension plan has enough assets to pay 70% of those benefits.

a) The first $1,500 of your monthly benefit is guaranteed:

  • $1,050 would come from the assets in the pension plan (70% x $1,500)
  • $450 would come from PBGF

b) For the remaining portion of your monthly benefit, you would receive $1,050 per month:

  • $1,050 from the assets in the pension plan (70% x $1,500)
  • The PBGF does not apply as it only guarantees the first $1,500 payment

Total monthly benefit: $2,550

Some benefits are excluded from the PBGF, including:

  • benefit improvements made less than five years before the plan is terminated
  • cost-of-living adjustments to protect against future inflation