# What happens to Pension when you change jobs?



## showmethemoney45 (Feb 27, 2015)

My husband has a defined pension plan. It says total value is approximately 100k. He is 35 years old but doesn't want to stay in his current job forever-lets say 5 more years. What happens with his pension?


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## cashinstinct (Apr 4, 2009)

he can get the value transferred to a RRSP equivalent called LIRA. The funds are locked there but he can choose the investments.

he could choose to get a small pension when he gets to the age of retirement.


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## RBull (Jan 20, 2013)

^ Yes. Talk to the plan administer to find out if it is provincially or federally regulated which has some impact on the rules, mainly on withdrawals.


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## GreatLaker (Mar 23, 2014)

Another option not mentioned above is to transfer the pension proceeds to the new employer's plan. That is fairly common in public service plans and union plans that have similar benefits, but it is rare in private sector DB plans.

There is a good web page at the following link. It focuses mostly on locked-in plans but at the start it talks about all available options.
http://www.avrexmoney.com/retirement/locked-in-retirement-accounts-a-pension-road-map/

Another article here:
http://www.theglobeandmail.com/globe-investor/personal-finance/retirement-rrsps/what-to-do-with-your-pension-if-you-quit-your-job-early/article17142100/


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## dorian01 (Dec 29, 2014)

Personally, I would just switch it to a LIRA (Lock-in RRSP) when he leaves, that way you have far more control of what it's invested in etc. Do not leave it with the employer no matter what you do, who knows what will happen to that employer down the road.


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## MrMatt (Dec 21, 2011)

dorian01 said:


> Personally, I would just switch it to a LIRA (Lock-in RRSP) when he leaves, that way you have far more control of what it's invested in etc. Do not leave it with the employer no matter what you do, who knows what will happen to that employer down the road.


That's what I did, at some brokerages you'll get the lower fee rate if your total accounts meet a certain threshold.


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## Eclectic12 (Oct 20, 2010)

dorian01 said:


> Personally, I would just switch it to a LIRA (Lock-in RRSP) when he leaves, that way you have far more control of what it's invested in etc.


Control is one factor to the decision ...




dorian01 said:


> Do not leave it with the employer no matter what you do, who knows what will happen to that employer down the road.


YMMV ... I have co-workers who regret going the LIRA route compared to keeping a fully indexed smaller pension.


Cheers


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## OhGreatGuru (May 24, 2009)

showmethemoney45 said:


> My husband has a defined pension plan. It says total value is approximately 100k. He is 35 years old but doesn't want to stay in his current job forever-lets say 5 more years. What happens with his pension?


Tell him to ask his pension administrator. Rules will vary with federal/provincial jurisdiction; and the particular plan provisions.


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## dorian01 (Dec 29, 2014)

Eclectic12 said:


> Control is one factor to the decision ...
> 
> 
> 
> ...


I have friends too, who worked at Sears Canada and Stelco in Hamilton ON. Needless to say, the health of these pensions has decreased and they have regretted leaving their defined benefit pensions behind. However, if you have a solid government pension for example, I agree, leave it with the employer.

With a company, who knows what will happen 20 years down the road and whether they will mange the pension funds appropriately. I would much rather manage the account myself....


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## sags (May 15, 2010)

I was always solidly behind keeping the defined pension monthly benefit, but times have changed, things are learned and sometimes you have to change your view.

My company has been giving the choice of a commuted value or the monthly pension for a short period of time. 

They are giving 100% of the commuted value, while the fund is only funded at 67% in the case of a company bankruptcy.

The union says they aren't worried about it..........but I have heard that line before, when they should have been worried about something.

If offered to me today.............I would take the commuted value to guarantee I received the full 100 %.


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## Beaver101 (Nov 14, 2011)

^


> ... If offered to me today.............I would take the commuted value to *guarantee* I received the full 100 %.


 ... no such thing as a "guarantee" on both the cv now or the monthly pension on retirement, never mind the 100% its value, in the private sector. 

OTOH, not to say there isn't a guarantee for the public sector as spported by the taxpayers.


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