# Considering Transfer from one DB Pension Plan to Another



## loggedout (Dec 30, 2009)

I used to work for a federal crown corporation and contributed to the public service pension (PSSA) and now work for a company owned by the government of ontario, where I am contributing to another DB pension. There exists a pension transfer agreement between the PSSA pension and the new pension plan, and so I am trying to figure out what I should consider in my decision making as to whether I should transfer my pension over or not.

One thing that stood out to me was that the transfer value that was provided to me at the time I left the PSSA is more (total amount, both within and outside tax limits) than the estimated transfer amount that was provided me to by my new employer to provide me with the equivalent service under their plan (8 years) - it's roughly my within tax limit amount only. Does this make sense and I am losing something in the transfer?

I'm lost and I'm unclear what factors should I consider in this whole process, and to whom I can go to for advice besides the pension plans themselves.

Any informed responses would be greatly appreciated!


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## Eclectic12 (Oct 20, 2010)

First question is how the benefits compare ... a higher payout could mean more was collected to pay for a higher level of benefit. Sure, the equivalent service might be achievable but is the payout going to be the same?

Using a simplified formula to illustrate ... if the PSSA formula is "years of service" x "best five of last seven" x "2%" but the new company formula is "years of service" x "best five of last seven" x "1.5%" then I'd be thinking it's better to leave it where it will pay out more. Or if the PSSA is fully indexed and the new company is not ... then again I'd consider leaving it.

Unless you are clear on how close it matches up, what any remainder would be and what level of benefit ... you might end up with one plan but be worse off.

Without details it's hard to say but I suspect that where one part of the payout is able to cover the new plan for the full amount of time ... it may be that way because the new plan is paying out substantially less or does not provide the same range of benefits (ex. some public plans include bridge benefits, I have to pay extra if I want bridge benefits).


Is there a time limit that you have to make a decision?
I don't believe this is an easy comparison that one should rush.

Cheers


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