Leaving your job
Leaving a job with an employer participating in the plan? Find out what you can do with your plan contributions.
Defer your pension and keep your benefit in the plan until you retire
If you leave your job before the earliest retirement age of 55, you can keep your pension contributions on deposit in the plan. This is called a deferred pension.
If you think you may work again for an employer participating in the plan (or another employer that allows you to transfer your pensionable service from the plan), you may wish to consider leaving your pension in the plan. When you return to work with an employer participating in the plan, you may be able to re-enrol in the plan and start contributing again. This will increase your pensionable service, which could lead to a larger pension.
Even if you don’t plan to return to work for an employer participating in the plan, you can leave your pension on deposit in the plan. A pension is a significant financial asset that will provide you with a lifetime monthly income when you retire.
After you reach your earliest retirement age and before December of the year you turn 71 (the age when you have to start receiving your pension), you may apply to receive a monthly pension that will continue for your lifetime.
You may be eligible for an unreduced pension before you reach normal retirement age. Remember, you are responsible for choosing the date your pension will start and you must apply to start your pension. If you do not apply to start your unreduced pension when you are eligible, you will not be entitled to have your pension backdated to a previous date.
Watch the video to learn more about how the decisions you make today can impact your retirement income in the future.
Why keep your pension benefit in the plan?
If you leave your job, you may consider transferring the commuted value of your pension out of the plan, but first be aware of the many advantages you enjoy as a plan member:
- Security for life: Your defined benefit pension plan is designed to provide you with a dependable source of income in retirement. Unlike other plans or investments (such as RRSPs), you don’t have to worry about outliving your assets or running out of money. You can enjoy the peace of mind and security of knowing you’ll receive your monthly pension payments for life.
- Investment management: As a member of the plan, your retirement fund is managed by BCI—one of the largest institutional investors in Canada. You can relax in the knowledge that your investments are in good hands, and your benefit is being professionally managed on your behalf. However, if you leave the plan, you take on all the risk for your future investment returns, as well as any fees related to managing your investment, and the responsibility of planning for a stable income in your retirement.
- Medical and dental benefits: When you retire, any extended health care and dental coverage you were receiving through your employer will stop. However, as a plan member, you can apply for extended health care and dental coverage when you apply for your pension. This can also include coverage for your spouse and eligible dependents. This option is only available to members who remain in the plan.
- Cost-of-living increases: Throughout your retirement, your pension may receive annual inflation adjustments to help it keep pace with the rising cost of living. These adjustments are not guaranteed, but once you receive an adjustment, it will be added to each component of your pension for as long as you receive it.
- Continuing benefits: If you die before your spouse (or other beneficiary), your pension can provide them with a monthly income for their lifetime, depending on the pension options you choose at retirement.
- Tax advantages: Although your monthly pension payment is taxable income, those taxes are spread out across your retirement, so they may be assessed at a lower rate. But if you transfer your benefit as a lump sum, a portion of it could be taxed all at once resulting in a large tax bill.
We’re here to help you make the right decision for your situation. If you have any questions, contact the plan through My Account. And remember to keep your contact details up to date so we can reach you with important information about your plan.
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