Pension Plan FAQs
Here are details about the new BMO U.S. Pension Plan in-service distribution option.
What’s changing with our U.S. retirement program?
The BMO U.S. Pension Plan (the “Plan” or the “Pension Plan”) has been amended to allow certain employees age 59½ or older with a vested pension benefit under the account-based benefit formula only to request a distribution while still employed by BMO. This new pension payment option is called an in-service distribution. Previously, employees had to terminate employment or retire to request a distribution from the Plan.
Why is BMO making this change?
This change to the Pension Plan provides flexibility in how and when you can receive your vested account-based benefit under the Pension Plan.
When does this change take effect?
On or after August 6, 2025, eligible employees age 59½ or older can request an in-service distribution. If you are not yet age 59½, this option will become available to you when you reach that age.
Who is affected by this change?
The following employees age 59½ or older are eligible to request an in-service distribution from the Plan:
- BMO U.S. employees hired on or after January 1, 2002, with a vested pension benefit under the account-based benefit formula in the BMO U.S. Pension Plan.
- Legacy Bank of the West employees with a vested pension benefit under the Employees’ Retirement Plan of BancWest Corporation (ERP) that was transferred into the Plan as of December 31, 2023.
The following employees are not eligible to request an in-service distribution, even if they are age 59½ or older:
- BMO U.S. employees hired prior to January 1, 2002, with a final average pay benefit in the BMO U.S. Pension Plan.
- Legacy Bank of the West employees with only a final average pay benefit in the United California Bank Retirement Plan (UCB).
Note: If you are not eligible for in-service, any pension benefit earned will remain available for you when you terminate employment or retire.
There is no change to benefits for former BMO employees or retirees.
What in-service distribution options are available?
You have the following distribution options:
- Lump Sum: A one-time payment equal to the entire vested pension benefit under the account-based benefit formula. A lump sum may be taken as a cash payment to yourself or rolled over to another qualified plan (including the BMO 401(k) Savings Plan) or IRA.
- Annuity: Traditionally elected to create a dependable income stream in retirement, you may choose from various life annuity options as provided under the Plan.
What should I consider before requesting an in-service distribution?
It’s important to assess your financial situation and retirement spending goals before deciding to claim your benefit early.
- Rolling over your pension into your 401(k) or IRA offers continued tax-deferred growth, and the flexibility to maintain control over your investments.
- A distribution may be beneficial if you have health issues or need immediate financial support that cannot be satisfied through other sources.
- Your benefit will be reduced from what it would be if you waited until retirement.
- Distributions not rolled over are subject to income taxes, and your pension income may be taxed at a higher rate when combined with your employment income.
How can I find out how much I have earned in the Plan?
The My Benefits and Retirement site is available from Workday for current employees and offers online access to information about the Plan.
To access and use the My Benefits and Retirement website features:
- Open Workday, click My Benefits and Retirement application
- Select the option On-Network or Off-Network access
- Select the Project Your Retirement Income link from the Retirement Hub
- Enter the requested information to “Calculate” a future pension estimate
Note: The pension projection tool asks you to provide a “Last Day of Employment.” This date is only required for administrative purposes to calculate the amount of your benefit. This date is not reported outside of the tool, does not impact your employment with BMO, and does not imply that you intend to separate from employment.
What do I need to do if I would like to request an in-service distribution?
You will need to contact the Human Resources Centre (HRC) at 1-888-927-7700 and say “Pension” when prompted to speak with a pension specialist. The representative will then be able to review the distribution options, timing, and kick-off the in-service distribution process when you are ready.
For more information, refer to the BMO U.S. Pension Plan Summary Plan Description (SPD).