What can I do with my pension plan if I leave my employer?

Jamie Golombek, vice-president of taxation and estate planning at AIM Trimark Investments, has the answer.

Jamie Golombek 17 April, 2003 | 1:00PM
Dear Expert:

I have 14 years of service with a Crown Corporation, and am 52 years of age. I am thinking of leaving within the next year or so. I am a member of the corporation's defined benefit pension plan. The corporation is being privatized and the pension plan might be changed drastically; for example, there may be a loss of superannuation. What are my best options for my savings within this plan? If I do transfer out my money, what qualifies as a "locked-in RRSP" and where is the best place to invest in one?

Expert Answer:

Without knowing the details and specifics of your pension plan, it is impossible to determine your best options for savings within that plan. That being said, you are able to transfer your pension money out of the pension plan into a "locked-in" RRSP.

Under a locked-in RRSP, although no withdrawals are permitted, conditions are otherwise very similar to a regular RRSP, with a full choice of investment options. Most financial institutions, as well as mutual fund companies, offer locked-in RRSPs where you can invest in any qualified investment such as shares, bonds or mutual funds.

Consult with your financial advisor who may be able to give you more information on what type of asset allocation inside your locked-in plan would be appropriate for you given your age, risk tolerance and financial goals.

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Jamie Golombek

Jamie Golombek