Under certain circumstances you may be able to transfer
pension monies from your employer's plan on the termination of your employment.
Legislation requires pension plans to provide you with the right to transfer pension
monies if:
- you are vested,
- you terminate employment before becoming eligible to receive
a pension, and
- the termination occurred on and after January 1, 1993.
You may transfer the commuted value of your pension
benefits to:
- another pension plan willing to accept the funds;
- a locked-in retirement account or LIRA (formerly referred to
as a locked-in RRSP); or
- an insurance company to purchase a deferred life annuity.
Your funds may be left in your employer's pension plan to
provide a deferred pension.
If you are eligible for a pension or if you terminated
membership prior to January 1, 1993, then you do not have the right to portability unless
your plan specifically provides for it. The Act would not prohibit portability from being
offered.
For some defined benefit plans, there may not currently be
enough money in the pension fund to pay the commuted value of your pension. In this case,
you may not be entitled to transfer the full amount. However, the balance of the commuted
value of your pension must be transferred with five years of the initial transfer.
Within 90 days after the termination of membership, the
plan administrator must provide you with a termination statement. The termination
statement must indicate the amount of benefits payable from the plan, the options you have
available with respect to the benefits, and the deadlines you have for choosing an option.
After you have decided to transfer money from the plan and
have provided the administrator with all the necessary documentation, the administrator
has 60 days to transfer the money.
