Key considerations for transitioning a pension plan

 

Leaving an employer—whether it’s planned, unexpected, or part of a broader life transition—often brings unfamiliar financial choices. One of the most important is what to do with your workplace pension. The options can feel complex, and the decisions you make now may have lasting implications for your retirement, taxes, and long-term financial security. Our team can help you clarify your options and make the decision that works best for you. Here are some key considerations to keep in mind.

  • What to do with your workplace pension

    This can be one of the most important financial choices you make, with lasting implications for your retirement, taxes, estate planning, and long-term security. Most departing employees with defined benefit or defined contribution pension plans face two common choices:

    • Leave the pension with the employer and receive income at retirement
    • Transfer to a locked-in plan and receive a commuted value cash payment

  • Understanding the risks and opportunities

    When leaving a pension plan, it’s important to understand how your choice affects income security, flexibility, and exposure to market fluctuations. Some options offer guaranteed payments, while others shift investment risk to you.

  • Tax considerations

    Pension choices can carry very different tax outcomes—both immediately and over time. It’s important to consider how your decision will affect taxable income, Registered Retirement Savings Plan (RRSP) room, and access to government benefits.

  • Estate planning considerations

    Your pension decision may impact what, if anything, passes on to your beneficiaries. Not all pension options provide estate value, so understanding survivor and estate implications is essential.

  • Investment advice

    The level of control you have over your pension investments depends on the option you choose.  Working in close collaboration with our partners and staying true to your unique Investment Policy Statement (IPS), we supply direct and indirect, personalized investment advice that reflects changing market conditions and your evolving needs.

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