If you leave a job and end your membership in a pension plan before retirement, you have the choice to keep any vested pension funds you have accumulated held in the pension, or to have the value transferred to another pension plan, to a locked-in retirement savings arrangement, or to have a deferred life annuity purchased for you. Vesting in a pension plan occurs on the earlier of 5 years of continuous employment or 2 years of pension plan membership.
If you choose to have your vested funds transferred to a retirement savings arrangement, you have three alternatives:
- A locked-in retirement account (LIRA),
- A Life Income Fund (LIF), or
- A life or deferred life annuity.
Before transferring your pension to a locked-in retirement savings arrangement, be sure you are dealing with an authorized fund. Check our list of financial institutions authorized to sell Locked-in Retirement Accounts (LIRA), Life Income Funds (LIF) and Annuity contracts under the Pension Benefits Act.
If you leave a job and end your membership in a pension plan before you are vested, you are entitled only to a return of your own contributions plus interest.