Employer pension and group retirement plans
Defined benefit vs defined contribution, vesting, and what to do when you change jobs.
Many Canadians build retirement income through workplace pensions or group RRSPs. DB plans emphasize predictable income; DC plans put investment risk on you. Provincial pension standards legislation protects members in registered plans.
Always read your plan booklet and consult your administrator or a licensed advisor before transferring or unlocking funds.
- Summary plan description or booklet from your employer
Explains formula, vesting, survivor benefits, and investment options.
- Pension statements (annual)
Track credited service and projected pension.
- Defined benefit (DB) promises a formula-based retirement income; defined contribution (DC) depends on contributions and investment returns.
- Vesting determines when employer contributions are yours if you leave.
- Transfer values (commuted value) vs deferred pension have tax and longevity trade-offs.
- Coverage may require a waiting period; union plans have collective agreement rules.
- On termination, options often include leaving money in the plan, transferring to a locked-in account, or taking a taxable cashout (restricted).
- Spouse rights on death or marriage breakdown may affect pensions—get legal advice.
Disclaimer
This guide is for general information only. Tax and benefit rules change. Always confirm current requirements with the Canada Revenue Agency, Service Canada, or a qualified financial or tax professional before making decisions.