Sherwood Park Pension Transfer

Retiring with a Workplace Pension or Defined Contribution Plan in Sherwood Park?

Retiring or leaving an employer can mean making an important decision about your workplace retirement savings. If you have a defined contribution pension plan, locked-in pension, group RRSP or another employer retirement plan, you may need to decide where those assets should go and how they fit into your retirement income plan.

At PAX Portfolio Advisory in Sherwood Park, we help individuals and families understand their retirement plan options and build an investment and income strategy for the next stage of their lives.

What Happens to Your Pension When You Retire or Leave Your Employer?

Depending on your workplace plan, you may be given several options when you retire, change employers or when a pension plan is wound up. For example, someone leaving an Alberta-registered pension plan may be able to transfer eligible pension assets to a Locked-In Retirement Account (LIRA).

Your options can depend on:

  • Whether the plan is a defined contribution pension, defined benefit pension, group RRSP or another workplace retirement plan
  • Your age and expected retirement date
  • The pension legislation governing the plan
  • Whether some or all of the money is locked-in
  • Your spouse or common-law partner and any pension-partner rights
  • Whether you need retirement income immediately
  • Your other RRSPs, TFSAs, pensions and investments
  • Your tax situation and estate-planning objectives

Important: The pension jurisdiction is determined by the pension administrator and may not simply be based on where you currently live or work. The plan documents should be reviewed before acting.

Transferring a Defined Contribution Pension in Sherwood Park

If you have accumulated a significant balance in a workplace defined contribution plan, retirement may be the first time you have full responsibility for deciding how the money should be invested and eventually withdrawn. We can help you review the following questions:

  • A LIRA can hold eligible locked-in pension assets on a tax-deferred basis. It is subject to pension rules that restrict withdrawals and govern how retirement income may be paid.

  • The investment strategy should reflect when you expect to need the money, your other sources of retirement income, inflation, liquidity needs and the level of market risk you can comfortably accept.

  • Pension assets should be coordinated with CPP, OAS, RRSP and RRIF withdrawals, TFSAs, non-registered investments and any employer pension income.

  • An Alberta-regulated LIRA may generally be converted to a Life Income Fund (LIF) once the applicable minimum-age and legislative requirements are met.

  • Alberta rules may allow a one-time unlocking of up to 50% when an eligible LIRA is transferred to a LIF, subject to age, documentation and pension-partner requirements. The current rules should always be confirmed before a transfer.

Pension Plan Wind-Ups and Employer Plan Terminations

Have you received a letter saying that your workplace pension or retirement plan is being terminated or wound up?

You may be given a deadline to select what happens to your retirement savings. Before completing the transfer forms, it can be valuable to understand:

  • Where the money is permitted to be transferred
  • Whether any portion must remain locked-in
  • Which registered account is required to receive the transfer
  • The investment choices available after the transfer
  • How the transfer will affect your retirement income plan
  • Potential tax consequences
  • Beneficiary and estate considerations
  • Whether pension-partner consent or a waiver is required

If you have received a pension package and are unsure which option to select, we can review the package with you and explain how the available choices fit into your broader retirement plan.

Retirement Planning for Sherwood Park Residents

A pension transfer is only one part of a retirement plan. For clients in Sherwood Park and Strathcona County, we can incorporate the pension into a broader plan covering:

  • Retirement income and cash-flow planning
  • CPP and OAS timing
  • RRSP and RRIF withdrawals
  • LIRA and LIF income
  • TFSA planning
  • Investment management
  • Tax-efficient withdrawal sequencing
  • Estate and beneficiary planning
  • Charitable giving

Frequently Asked Questions About Pension Transfers

  • Depending on the type of plan and the options provided by the pension administrator, you may be permitted to transfer eligible pension assets to an appropriate registered account at another financial institution.

  • Both can hold tax-deferred retirement investments, but a LIRA generally contains money originating from a pension plan and is subject to additional pension legislation and withdrawal restrictions.

  • Withdrawals are normally restricted. Alberta provides specific circumstances in which qualifying locked-in pension money may be unlocked. Eligibility and documentation requirements should be confirmed under the legislation governing the account.

  • For eligible Alberta-regulated LIRAs, there may be a one-time opportunity to unlock up to 50% when establishing a LIF, subject to applicable requirements, including age and, where required, pension-partner consent.

  • An eligible direct transfer to an appropriate registered account can generally preserve the tax-deferred status of the assets. Taking pension money as cash may create immediate tax consequences. The plan’s specific options should be reviewed before acting.

Talk to a Financial Advisor in Sherwood Park

If you are retiring, leaving your employer or have received a pension wind-up package, you do not have to make the decision on your own. PAX Portfolio Advisory can help you review your pension options and determine how the assets fit into your overall retirement plan.