Pension Commutation (The Workers’ Compensation Act, 1974)
POL 13/2016, Pension Commutations (The Workers’ Compensation Act, 2013) establishes guidelines for commuting permanent disability pensions payable under The Workers’ Compensation Act, 1974.
- Annually, Operations staff will send letters to workers who are only receiving permanent disability pension benefits under The Workers’ Compensation Act, 2013. Letters will advise eligible workers of the:
- Pension commutation option.
- Approval criteria for pension commutation.
- Financial impact of a pension commutation.
- Recommendation that the worker should seek independent financial advice before making a decision (not funded by WCB).
- Current value of a full pension commutation (the value will be based on the date the pension is commuted).
- Steps to request a pension commutation.
- Clarification that the worker will remain eligible for other WCB benefits if he or she decides to commute the pension (e.g., medical care, medication, etc.).
- Operations staff will not send letters to workers who are receiving earnings loss benefits.
- If a worker wants the WCB to commute their pension, the worker must send a completed Commutation Qualification Review form (PCOM) to their Operations staff. The commutation request must:
- Provide reasoning for the request.
- Note the amount to be commuted.
- Be signed by the worker.
- Subject to the guiding principles noted in Point 2 of POL 13/2016, Operations staff may approve pension commutations in situations including, but not limited to, the following.
- Home purchase.
- Automobile purchase.
- Investment in a potentially successful business.
- Debt payment.
- Education (aside from the educational expenses the WCB pays for).
- The worker is terminally ill.
- Operations staff may request additional information from the worker to help make a decision.
- If the worker still wants to commute their pension, the commuted pension will be issued to the worker.
- If Operations staff does not approve the pension commutation, Operations staff will explain to the worker their decision:
- By phone, and
- In writing.
- The Board Appeal Tribunal will review and make decisions on pension commutation appeals (POL 22/2013, Board Appeal Tribunal will apply).
- To ensure that the information used to commute pensions is accurate, the Internal Actuary will annually update:
- Current interest rates, and
- Life expectancy rates.