A Second Chance

Well that was unexpected.  I opened my mail yesterday to see a rather thick envelop from my pension plan so I opened it and read the letter and stopped walking for a second.  Then I read it again and realized I was getting a second chance to change a mistake that occurred when I left work.

My work pension was a defined contribution plan which I had for a number of years put in various voluntary contributions.  It didn’t seem like much at the time but it ended up being close to a third of my pension’s value when I left work in late 2017.  The total pension is now worth around $167,000.  I also knew that according the rules around the pension I could only unlock the voluntary contribution portion and move it to a RRSP account within 30 days of leaving work.  The reason I would want to do this is it would allow me the option of using that money prior to turning 50 (otherwise it would be rolled in with my locked in money that I can’t use until age 50).

Prior to leaving work I had contacted my pension plan to find out how that would work and I was told they would mail me a letter with my options.  Just one small problem occurred…I didn’t get a letter from them and by the time I thought about it the 30 day window had passed.  Rather than blaming other people, I just accepted I didn’t remember to follow up on that so I now had more money locked away than I wanted but I checked my numbers and I figured I could make it work regardless.  So I just forgot about the mistake and moved on.

Now nearly 17 months after leaving work I now have that letter with my options including the one to move over $50,000 out of my pension into my RRSP.  WTF?!?!? Obviously someone screwed up big time at their end of the situation (since the letter is MORE than a little late) and because of that I’m getting a second chance to move that voluntary contribution money out.  I really don’t care how this happened I’m just thrilled I get a second shot at fixing this mistake.

I don’t particularly need the money but I prefer the flexibility have having that extra $50,000 or so in my RRSP account so I can access it at any time rather than being stuck waiting until 50 to access the money (like the rest of the pension which is locked in).

So now I’m printing off forms and stopping by my bank tomorrow to figure out how to make this happen.  All in all, it’s a nice surprise to have in life.  So did you ever get a second chance to fix a retirement mistake?  How did it turn out for you?

3 thoughts on “A Second Chance”

  1. I was under the impression that sponsor-contributed money (which goes into a LIRA) was actually locked-in until age 55. So this option to convert some to RRSP is even better.

    Where did you get the age 50 number? I like your number better so I would prefer to be wrong. Perhaps your provincial legislation is different? (I am in Ontario)

  2. Thanks for this Tim. I’m supposed to get mine some time in April / May but the amount is way less than yours. This is a nice reminder that I need to keep an eye on the mail. I believe my FP once told me that the money will be locked in until 55. Would be nice if you can provide an update after you meet with the bank. =)

  3. @Neil – Yes the main pension is locked but my voluntary part can be unlocked. The age 50 is part of the PEPP plan itself. 55 is more common and actually the age lock on my small LIRA I have from a previous workplace.

    @misuchiru – The bank was actually very helpful on how to fill out the form…you know it is bad when I got confused reading the bloody thing. So speaking to someone who has used it before was very helpful and we had it done in like 15 minutes.

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