Transferring Pension Funds

[Krikit 1,164]

Ugh. Has anyone had to transfer their pension funds after leaving their place of employment? I have just spent the last week speaking with brokers and cramming on investment portfolios. I had a deadline because my funds would be locked into my former employer's pension plan if I don't move them out by this Friday. (Leaving them locked in would be a poor financial decision on my part.)

What a nightmare. Did you know that Canada won't allow you to transfer funds once you become a non-resident? Did you know that some States won't allow you to do it even if you already have a pre-existing broker-client relationship?

Working to a deadline to fill out TONS of forms, provide legal documentation, and corresponding by phone, email, and courier made me feel like I was going through the visa and AOS process all over again. I had a non-stop headache and generally felt sick to my stomach the entire time. It has been SO frustrating trying to do this long distance. I wish I had just gotten on a plane and gone up there.

So.... the broker should receive the documents by noon today. I pray to God that I have filled them out correctly and that I haven't missed something. They will then be couriered to my former employer's pension people tomorrow in order to arrive by Friday's deadline. I am breaking out into a cold sweat just thinking about it.

I WANT MY MONEEEEEEEY!!!

Now. Just substitute a few words and this will sound like the "Where's my visa?" "Where's my GC?" "Where's my EIC?" threads.

Sorry, but I just had to get that off my chest. I feel better now. Thank you.

[Carlawarla 1]

No, I did not know about this!!! That is incredible. We're allowed to collect CPP, but not allowed to transfer our pensions here if we're a non-resident of Canada? #######?? I have a pension with the Sask. government in Canada. Do you mean I have to move it??? When??? Sorry, I'm not disbelieving you at all, I've just never heard about this, and need to look into it. Thanks for bringing it to my attention. If you have any links or information I'd appreciate it if you could send it my way. Thanks so much. I'm sorry for you that this has been such a hassle as well. Something I have to look forward to eh?

Carla

[Cassie 8]

There's a great book that Reba usually recommends that talks about all this stuff -- I wish I could remember the title.

[Carlawarla 1]

I didn't know that Cassie....

REBBBBBBBBBBBBBBAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAA

hehe

Maybe she'll come read this thread.

Carla

[Jasman0717 9]

Wow, sounds like a big pain in the butt

[~Nini~ 2]

That sucks, Krikit.

[Flames9_RN 358]

http://www.amazon.com/Border-Guide-Canadia...l/dp/1551805723

The Border Guide is the book (authoer is robert keats)

I do know once ur a non resident of Canada, One can't move their RRSPs around ( i think) last yr (as a non resident of canada) I cashed in a pile of my RRSP's!! Cdn govt automatically deducts 25%!! No clue on pension funds

[Killer_Clown_2009 0]

I didn't bother to transfer mine, it's all still sitting there waiting to be dealt with at a future time.

[Krikit 1,164]

No, I did not know about this!!! That is incredible. We're allowed to collect CPP, but not allowed to transfer our pensions here if we're a non-resident of Canada? #######?? I have a pension with the Sask. government in Canada. Do you mean I have to move it??? When??? Sorry, I'm not disbelieving you at all, I've just never heard about this, and need to look into it. Thanks for bringing it to my attention. If you have any links or information I'd appreciate it if you could send it my way. Thanks so much. I'm sorry for you that this has been such a hassle as well. Something I have to look forward to eh?

Carla

I think I may have confused you. When I resigned from my position with my former employer I received a letter from the pension plan group. They gave me 3 options and I was to choose one of them: 1) Leave the contributed funds in the company plan; 2) Transfer the funds to a locked-in investment; 3) Transfer the funds to a new employer.

The provincial government perhaps does not offer those options. Your HR benefits rep would have advised you when you had your exit interview.

I receive a widow's pension from CPP and it remains in place.

[Krikit 1,164]

I have The Border Guide somewhere. I think it's still in one of the unpacked boxes in my garage. lol

It's not a bad read, but has very broad and cursory information in it. Nothing indepth. Which, of course, you would expect since each situation is unique and would require a book on its own. I recommend checking it out at the library or visiting one of the big bookstores one rainy day and reading it over a coffee.

[S & J 0]

My understanding was that once you are a non-resident for two years you can have access to the locked-in RRSP. Or do you mean leaving it with your employer. I am very interested in this because I will have to deal with the same thing in March. Although I did hear something about new legislation for Alberta. Hmmm. Glad I have a bit of time. Wowsers, that would be stressful!

[Krikit 1,164]

My understanding was that once you are a non-resident for two years you can have access to the locked-in RRSP. Or do you mean leaving it with your employer. I am very interested in this because I will have to deal with the same thing in March. Although I did hear something about new legislation for Alberta. Hmmm. Glad I have a bit of time. Wowsers, that would be stressful!

Hmmm. I don't have any RRSP's so I can't speculate. Perhaps Flames can chime in here.

If I'd left it with my former employer the funds would have been locked in at a specific amount and I would have to wait till age 65 to begin receiving them. In other words... no growth between now and then.

I have transferred everything to a mixed risk investment portfolio which is locked in for the next 7 years. I can start drawing 10% a year from it at age 55 if I choose to do so. I have no intention of doing that at this point but I can't predict the future so that may change. Also, the funds technically aren't locked in from now until then. I can transfer them elsewhere at any time, however I will then have to pay a fee to do so. But I can only transfer them to another locked-in account. (Is this making sense? lol)

Edited September 13, 2007 by Krikit

[Flames9_RN 358]

I was told by TD WaterHouse that once a Non Resident of Canada,One can't transfer $$$$ (maybe a bad term,maybe "trade" would be a better term) from your RRSP, pretty just have to be left alone. If you want to take them out, you can do that at any time

[Reba 2]

RRSPs could also be further complicated by state laws restrictions on foreign investment brokers. I had to cash mine out and got dinged the 25% because of a stupid NC law that says I can't have a foreign investment broker. You can have foreign investments but foreigners can't manage it.

There are also IRS income tax implications if you keep your Canadian RRSPs and stuff in Canada. Depending on your circumstance, you may want to consider closing them out and putting them in something else in the US. Speak with a financial advisor before you move.

[Flames9_RN 358]

RRSP;'s can be a hassle. Liek Reba stated each State has different rules!! If ya do keep ur RRSP's in canada, ensure u report it to the IRS on a IRS form 8891. For the most part all it does is notify the IRS you have RRSP's, but then ya have to deal with your State!!

What a hassle it was reporting the drawing out of my RRSP's to the IRS!! Everyone has different way of handling it! ya cal l10 IRS people, and get 10 different answers! My inlaws got their accounted to do it, and it took them awhile to come up with a solution! They sent us pages and pages of info on how they came to their solution. Glad i didnt fit the bill!