# Can I transfer a pension to a LIRA during a leave of absence?



## TomB19 (Sep 24, 2015)

I'm on a leave of absence. I have an ROE that shows I've been terminated with the reason "leave of absence".

Can I transfer my corporate pension to a LIRA or do I have to quit to do that?


Thanks!


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## Beaver101 (Nov 14, 2011)

^ It looks like you have been terminated by your employer and it will be a matter of time that they'll calculate the present value of your pension, requesting you transfer out of their pension plan. Then in which ase, you have to transfer to a LIRA if you are not of a pensionable age/status.


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## Eclectic12 (Oct 20, 2010)

^^^

I'm not sure if we know enough details to be confident the employer's pension will force former employees to leave the plan. Some do and some don't.


The more common situation is for the employer to ask whether the former employee wants to stay in the corporate pension despite earning no further pension credits or leave it in the plan.

Leaving the corporate pension usually has more complicated choices. For example, for one company I left - there were three amounts for leaving the pension plan. Two were set amounts that had to be transferred to LIRA and RRSP. The third was my choice as if I did not use my RRSP contribution room to add it to my RRSP, it would be have been taxable income paid.


Assuming there has been a termination (quitting the job triggers the same choices) - the former employee should be notified of any decisions to make and what the implications of those decisions are.


Cheers


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## Beaver101 (Nov 14, 2011)

^ Does the reason of termination "leave of absence" on the ROE sound like a friendly termination? In which case, why would the employer go through the trouble of outlining choices for the employee or notify the employee of any decisions to make and what those implications of those decisions are (aka providing advice)?


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## Eclectic12 (Oct 20, 2010)

TomB19 said:


> I'm on a leave of absence. I have an ROE that shows I've been terminated with the reason "leave of absence".
> Can I transfer my corporate pension to a LIRA or do I have to quit to do that? ...


If you've been terminated - the company has quit on you! :wink:

What type of pension is it ... RRSP matching? Defined Contribution (DC)? Defined Benefit?


As I say in post #3, the employer should be outlining what your choices are and the implications of those choices.


Note that if it is a DC pension, be careful with the details. I have a few friends who were given the choice of staying with the DC pension. When one dug into the details, "staying" meant that account numbers were changed to keep straight that this account would no longer receive the employer $$ and fees that the employer used to pay would be deducted from the account. My friends decided a LIRA where they could make broader choices as well as have cheaper fees made more sense than "staying".

Or to put it another way - "staying" in a DC pension does not guarantee the costs stay the same.


Cheers


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## carverman (Nov 8, 2010)

Beaver101 said:


> ^ It looks like you have been terminated by your employer and it will be a matter of time that they'll calculate the present value of your pension, requesting you transfer out of their pension plan. Then in which case, you have to transfer to a LIRA if you are not of a pensionable age/status.


It depends on how the 'leave of absence" is defined.

For instance; I was terminated in mid 2002 with a "special leave of absence" which entitled me to being paid 80% of my salary monthly (including EI and CPP contributions)
for 14 months in order to get to 25 years of service pension benefits. 

Leave of absence is a nice way of being terminated as your employer recognizes your years of service,
compared to be "terminated without cause." (ie: laid off).

In the Nortel pension plan, if one had less than 10 years of service, they would have to leave the DB plan with a lump sum calculated as to what pension amount had accrued at time of termination. They also had a one time choice (1997)to move their pension to a company DC
plan, as the DB plan was no longer an option after 1997, for less than 10 years of service or new employees. 

However, *If the employee had 10 years of service( or more)*, they could choose one of two options:
Stay in the DB pension plan and collect their pension when they were eligible to collect (years of service +age), which generally is the "85" number or switch over to the DC plan. (ie: 25 years of service + age 60 = "85".) 

or have the lump sum transferred to an approved retirement tax sheltered plan.

In my case, I decided to stay in the Nortel DB pension plan. I started to collect at "83"..25 years of service + age 57= "82". after my special leave of absence.


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## ian (Jun 18, 2016)

Ask your employers Pension group. They will know the answer. Indeed, if you can transfer it out they will in all probability be the ones who are providing you with the transfer docs. Either them or the pension plan managers.


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## Eclectic12 (Oct 20, 2010)

Beaver101 said:


> ^ Does the reason of termination "leave of absence" on the ROE sound like a friendly termination?
> 
> In which case, why would the employer go through the trouble of outlining choices for the employee or notify the employee of any decisions to make and what those implications of those decisions are (aka providing advice)?


Can you point me at the provincial/territorial or federal legislation that gives the employer "non-friendly termination" as criteria for changing what is required?


Using Ontario as an example, in the Financial Services Commission of Ontario in *Know your pension rights if you leave a company* says:


> According to the Financial Services Commission of Ontario (FSCO), the regulator of employee pension plans in Ontario, you should be aware of your pension rights if you leave your employer before retirement age.
> 
> *Information rights*
> 
> ...


(Note that for the quoted section from the FSCO document, the bold text for "termination", "must provide" and "two choices" are mine. All other bold text is a reproduction from the document.)

Unless you can point me at legislation that allows an exception - it seems clear that the answer for why a company would do this is because the regulator requires it.


As for the "implications aka advice" - I was thinking less of "this a better choice for you" and more of "transferring $X does not use RRSP contribution room, choosing to transfer $Y to one's personal RRSP will required RRSP contribution room be available". It is more requirements than anything else. 

Which BTW, the letter when I left a couple of companies as well as what several terminated employees have described has lined up with.


Cheers


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## Eclectic12 (Oct 20, 2010)

carverman said:


> Beaver101 said:
> 
> 
> > ... It looks like you have been terminated by your employer and it will be a matter of time that they'll calculate the present value of your pension, requesting you transfer out of their pension plan ...
> ...


Interesting to know that there are levels of LOA. The only knowledge I have from co-workers is the "there's no holiday left, I need a week to take care of my mother, I am going LOA for a week without pay and will be back".


Regardless, as I say - most of the pensions I've left, it has been my choice as to whether to stay or go. For some friends - they decided to go because of higher costs/limited investment choices. I believe there's also been posts saying the company only provided matching RRSP contributions, the RRSP could not be touched until retirement or termination. It would seem there's far more out there than just "requesting you transfer out".


Cheers


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## Beaver101 (Nov 14, 2011)

Eclectic12 said:


> Can you point me at the provincial/territorial or federal legislation that gives the employer "non-friendly termination" as criteria for changing what is required?
> 
> 
> Using Ontario as an example, in the Financial Services Commission of Ontario in *Know your pension rights if you leave a company* says:
> ...


 ... you may be told all your rights as per the FSCO's document but it doesn't necessarily mean you get to exercise the right that you have chosen. Employees do not own the pension plan.


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## Eclectic12 (Oct 20, 2010)

Beaver101 said:


> ... you may be told all your rights as per the FSCO's document but it doesn't necessarily mean you actually get to exercise the right that you have chosen. Employees do not own the pension plan.


No ... the employee owns their contributions and the employer contributions (or the calculated CV). Should the company choose to disobey the regulations, the former employee can complain to the regulator, n'est pas?

(Or are you thinking pension regulator won't care that companies are ignoring their regulations?)


Do you have examples?

The terminated co-workers I've been in contact have consistently reported being given the "here is the value, here are you choices and which choice needs RRSP contribution room, which is taxable" letter. This is the same as my experience, where leaving was my choice.


Cheers


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## Eclectic12 (Oct 20, 2010)

Beaver101 said:


> Eclectic12 said:
> 
> 
> > ... Unless you can point me at legislation that allows an exception - it seems clear that the answer for why a company would do this is because the regulator requires it.
> ...


Out of curiosity ... wasn't it you that in other pension threads wanted the employer to go the extra mile to help out the employee?
(I seem to recall expecting that a DB pension should mean the CV was calculated/published to the employee yearly instead of around the dates the employee had to made decisions.)

I find it strange that in this case, despite the regulator apparently requiring certain things - you seem to be giving the employer the ability to ignore the regulations.


Or am I missing something?


Cheers


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## Beaver101 (Nov 14, 2011)

Eclectic12 said:


> No ... the employee owns their contributions and the employer contributions (or the calculated CV). Should the company choose to disobey the regulations, the former employee can complain to the regulator, n'est pas?
> 
> *(Or are you thinking pension regulator won't care that companies are ignoring their regulations?)*
> 
> ...


 ... are you that naive? Ooops, maybe not ... forgot you worked or still works in HR. 


If you want an example of what can possibly gets enforced, take Nortel.


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## Eclectic12 (Oct 20, 2010)

Beaver101 said:


> ... are you that naive? Ooops, maybe not ... forgot you worked or still works in HR.


Entertaining fiction ... too bad I've never worked in HR or Benefits. :apthy:




Beaver101 said:


> ... If you want an example of what can possibly gets enforced, take Nortel.


I missed the part where the OP's employer is about to go bankrupt and has been skipping making payments into the pension. :topsy_turvy:

If the employer is not going bankrupt, it seems more likely that the OP will get a letter with the available choices/deadlines, as outlined by the regulator. Based on the OP's question, I suspect the preferred choice will be some combo of a LIRA/RRSP to keep their taxable income down.


Cheers


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## TomB19 (Sep 24, 2015)

Eclectic12 said:


> I find it strange that in this case, despite the regulator apparently requiring certain things - you seem to be giving the employer the ability to ignore the regulations.


I've worked for two employers who made a policy out of ignoring regulations.

In the case of Viterra, they ignored two court orders to stop their contribution holiday and make up pension shortcomings. Retirees took reduced benefits for several years. The only consequence Viterra suffered was the cost savings minus their legal fees.

Welcome to the real world. It's not always a load of laughs.


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## Beaver101 (Nov 14, 2011)

^ +1 ... but Eclectic12 isn't convinced since the real world is considered entertaining fiction to him.


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## ian (Jun 18, 2016)

The real issue seems to be does a leave of absence constitute a resignation from the company. If it does not, then it is somewhat pointless to go about transferring the pension out of the company plan. Plus, is it a provincially regulated plan or is it federally regulated like the banks, etc?

Simply ask your employer. You may find that they will give you the choice of a leave while remaining on the payroll or being terminated. That will present you with a different decision tree.


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## Eclectic12 (Oct 20, 2010)

TomB19 said:


> I've worked for two employers who made a policy out of ignoring regulations.
> 
> In the case of Viterra, they ignored two court orders to stop their contribution holiday and make up pension shortcomings. Retirees took reduced benefits for several years. The only consequence Viterra suffered was the cost savings minus their legal fees.


 ... which raises the question of whether the regulator is toothless or whether some backroom dealings corrupted the legal process.

Where a company is breaking the law, your advice is what? 
Rollover and take because someone, somewhere at sometime failed to get what they were supposed to?




Beaver101 said:


> TomB19 said:
> 
> 
> > ... Welcome to the real world.
> ...


First off ... the entertainment was from the wild occupational guess from the failing memory. (Keep trying, if you make enough guesses, you might get it right someday.)

Secondly ... whatever you want to call the "non-real world" that I'm in ... it has been a barrel of laughs seeing a co-worker storm out of a meeting with his boss, have a heart attack at his desk, welcome him back to work to work after therapy then have the company declare him "redundant" and let him go. Conveniently, an ad was put up a week later by the company with identical skill, educational requirements and roles - only the job title had changed.


It's too bad there weren't some real world types like the two of you to tell him it was a waste of time to fight this as other companies have gotten away with similar. It would have saved him from a disability pension, full pension, damages in his favour and never having to work for a living again. 

{ Oh wait ... maybe he liked his fate! }



Cheers


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## Eclectic12 (Oct 20, 2010)

ian said:


> The real issue seems to be does a leave of absence constitute a resignation from the company.
> If it does not, then it is somewhat pointless to go about transferring the pension out of the company plan.


Isn't the issue more whether the OP is correct that a termination has happened?

As I say, under the provincial rules I've worked under, the few I've had contact with who were terminated, described the same letter/choices being given as those who quit to move to another job.




ian said:


> ... Plus, is it a provincially regulated plan or is it federally regulated like the banks, etc?
> Simply ask your employer. You may find that they will give you the choice of a leave while remaining on the payroll or being terminated. That will present you with a different decision tree.


Also good info to have and a good source of different choices.


Cheers


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## Beaver101 (Nov 14, 2011)

^^


> ... which raises the question of whether the regulator is toothless or whether some backroom dealings corrupted the legal process.


 ... or both?



> First off ... the entertainment was from the wild occupational guess from the failing memory. (Keep trying, if you make enough guesses, you might get it right someday.)


 ... not guessing here. It was stated in one of your 6,700+ posts and I don't have time right now to search for that post. And when I find it, will you desist to post? I hope not as you're entertaining just as you're naive. 

Btw - how come you have so much details here as a "co-workerer"? 


> Secondly ... whatever you want to call the "non-real world" that I'm in ... it has been a barrel of laughs seeing a co-worker storm out of a meeting with his boss, have a heart attack at his desk, welcome him back to work to work after therapy then have the company declare him "redundant" and let him go. Conveniently, an ad was put up a week later by the company with identical skill, educational requirements and roles - only the job title had changed.





> It's too bad there weren't some real world types like the two of you to tell him it was a waste of time to fight this as other companies have gotten away with similar. It would have saved him from a disability pension, full pension, damages in his favour and never having to work for a living again.
> 
> { Oh wait ... maybe he liked his fate! }


 ... don't put words in our mouths about telling his to give up the fight as fighting for his rights or what's rightfully his as an employee is a given. Keep in mind expensive classaction suits won't get you anywhere.


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## Eclectic12 (Oct 20, 2010)

Beaver101 said:


> Eclectic12 said:
> 
> 
> > ... the entertainment was from the wild occupational guess from the failing memory.
> ...


I don't recall posting while drunk enough to make the claim that an employer paid me for HR/Benefits type work.

As best I can recall, there's my post that the Canadian Insurance company I worked for paid a cash bonus for passing off hours study courses they felt would 
help employees better understand the business. Topics included Pensions including RoC and Quebec legislation, Life Insurance, Group Benefits, Statistics, 
Information Technology, Customer Service, ReInsurance etc.

Perhaps I didn't include enough details to make it clear that I was employed in a different area of the company. Other than that ... I'm drawing a blank so have fun searching.




Beaver101 said:


> ... Btw - how come you have so much details here as a "co-workerer"?


You've never bonded with a bunch of co-worker's so that you're invited to each other's home?
Or that despite most having moved on to other companies, the social network keeps getting together for years or decades later as best they can?


Depending on your POV, I was either lucky or unlucky enough to be the next row of cubicles over when it happened. I heard the boss' door slam, the creak of 
this fellow's chair as he sat down and then smack of his forehead as it hit his keyboard. If that wasn't enough convince the four of us in earshot to investigate, 
there was then the sound of his chair overturning as he fell to the floor. 

The bogus redundancy was easy to figure out, considering the internal posting was put up on the internal company jobs bulletin board two days after he was terminated and the newspaper ad with the same contents was in the weekend newspaper. It didn't take much comparison to see that the "redundant" position only differed in the title.

Even before the settlement, as long as there was no management attending, he would be invited to the party and show up with a modified corporate branded t-shirt. It had the regular logo where he'd added the red circle with a slash through it, superimposed on the logo.

Guess what topic would regularly come up? :cool2:




Beaver101 said:


> ... don't put words in our mouths about telling his to give up the fight as fighting for his rights or what's rightfully his as an
> employee is a given ...


Fine ... I answer your question with the best info I can find and the responses are about how there are examples of companies ignoring the regulator and failed
attempts to rectify the issue.

What *are* the examples of bad corporate behaviour that wasn't punished supposed to be saying, in your own words?
What would be your advice to the OP if his/her company ignores the pension legislation it is subject to?




Beaver101 said:


> ... Keep in mind expensive classaction suits won't get you anywhere.


Good to know as none of those who've talked to me about their problems with their employer have gone the class action suit route.
It's been anything from getting a lawyer to write a letter, complaining to the appropriate authority or a personal suit.



Cheers


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## OhGreatGuru (May 24, 2009)

TomB19 said:


> I'm on a leave of absence. I have an ROE that shows I've been terminated with the reason "leave of absence".
> 
> Can I transfer my corporate pension to a LIRA or do I have to quit to do that?...


All the comments so far are guesswork. It depends on the details of your pension plan; and the employer's meaning of a "termination for leave of absence." Heretofore I have not associated "leave of absence" with a "termination". But you learn something new everyday.

Ask your Pay & Benefits Office or Pension Administrator.


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