Locked in pensions
 

Anyone have much knowledge about these?

I've just started a new job and from the looks of things while they will match my contributions to a pension (not necessarily theirs), they will only put these into their own pension plan, which is defined contribution, locked in.

This pension sounds like a piece of crap, I'd rather keep the money in my own RRSP (this will also potentially allow me use the home buyers plan much sooner if I choose). From what I've read, you can only withdraw in very limited circumstances - but one of the situations is if the value in the pension is less than a certain value ($9Kish I think). Am I allowed to keep withdrawing whilst my company is contributing to the plan?

This is in Alberta, FWIW. Thanks in advance :)

Re: Locked in pensions
 

No one has any experience of these?

Re: Locked in pensions
 

I wouldn't give up free money, but each to their own and all that

Re: Locked in pensions
 

Oh no definitely not! I probably wasn't very clear. They will only put their contribution into their 'locked in' pension - I'd rather take this out and put it into an RRSP along with the rest of my (currently meagre) RRSP money. But from the info it looks very hard/impossible to do. Seems like a bit of a scam.

Re: Locked in pensions
 

I understand that. I still wouldn't give up free money (on the assumption that they will not contribute to your RRSP.

You could still contribute to your own RRSP. Why do you think it's a scam? Lots of people have locked in funds.

Re: Locked in pensions
 

In fact, you could say it is a responsible thing for the employer to do. They are trying to provide a pension for their employees, not just give them some extra cash that (some other) employees might withdraw and fritter away on toys.

Re: Locked in pensions
 

True, but they're not really trusting their employees much. I'll take what they offer but it's not ideal, I'd rather the flexibility of an RRSP.

Re: Locked in pensions
 

This really is pretty standard. my company offers two options,
1) we will deduct a % from your salary and put it in the RRSP portfolio of your choice
or
2) we will deduct a certain % and match those contributions if you use our RPP.

Obviously I go with option 2 because only an idiot would turn down free money.
within that RPP I have options as to the risk level of my investments. I'm quite conservative with my % but am happy to be a little riskier with there portion.

I cannot fathom how you can consider this a "scam"?

Re: Locked in pensions
 

I have the same circumstances. My contributions to the pension plan are mandatory with my employer. I contribute 8.9% and my employer puts in 9.8% (ish). It's not a great plan, but it is free money.

On the one hand, I like that it is mandatory and I am made to do it. On the other hand, I would prefer to have had the choice to put my money where I want to put it - but to do that, I have the choice of finding another employer.

You can remove your own contributions if you leave before two years are up, and then it is vested.

I don't see it as a scam, exactly - just a bit limited in choice.

Re: Locked in pensions
 

This is just like if you paid into a company pension in the UK. Just because in Canada there is the RRSP option for people doesn't mean companies follow it. In my experience most don't.

I guess I was lucky in my previous job that they just matched my contributions to an RRSP.

I found some info here on the unlocking of small amounts:

http://www.finance.alberta.ca/public.../polbull24.pdf

I don't know how simple it would be to end the pension, transfer it out and start it again, if it's possible at all.

This part doesn't make it sound too appealing though!

Re: Locked in pensions
 

I have merged your latest posts for ease of reading. :)

I'm not sure if you know but if you wish to quote more than one person, there is a multi quote button - hit that for the 1st post you want to quote then hit the normal quote button for the last one.

:)