Transferring your employer pension plan to leave more to your heirs
A pension mainly protects the couple. Once both parents have died, little or nothing is often left for the children. Transferred into an account in your name, the same value can go to them.
- The account balance goes to your loved ones
- Capital that belongs to you
- Pension or transfer analysis, free of charge
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What a pension provides at death
Defined benefit plans, according to Retraite Québec.
During retirement
When the retiree dies, the spouse receives a lifetime pension of at least 60% of the pension, unless the spouse waived it.
When the spouse dies
The spouse's pension stops at his or her death. Without a spouse, what remains depends on the plan's form of pension, such as a guarantee period.
For the children
Once both parents have died and any guarantee period has ended, the pension generally leaves nothing to pass on.
The benefits of a transfer for your estate
Capital that belongs to you
The value of your benefits is paid into a locked-in retirement account (LIRA) in your name, then converted into a life income fund (LIF) to provide an income.
The balance goes to your loved ones
At death, the account balance is paid to your spouse or, failing that, to your beneficiaries or heirs, instead of ending with the pension.
Death guarantees with segregated funds
Invested in segregated funds, the account benefits from death guarantees of 75% to 100% of deposits, depending on the contract.
A simpler transfer to your heirs
With a designated beneficiary, segregated funds are paid without going through the settlement of the estate, which speeds up payment.
Flexible income
With a LIF, you choose your income each year, between the minimum and maximum allowed.
Investments that fit your profile
You choose an allocation suited to your time horizon and risk tolerance.
The precautions, in full transparency
A transfer is not always allowed
It is generally offered when employment ends, before you qualify for an immediate pension, or within the windows set by the plan. Once the pension has started, it is generally no longer possible.
You give up a guaranteed pension
You take on investment, inflation and longevity risk. The decision is final.
A tax limit
Any amount above the tax-sheltered transfer limit is paid in cash and is taxable. Your statement shows it.
Tax at death
A LIF balance is generally taxable in the deceased's final return, unless it is transferred to the spouse. Your heirs receive the after-tax amount.
How I work
Your statement
You ask the plan administrator for your statement of benefits and the transfer value. I tell you what to ask for.
The comparison
Pension or transfer: return needed to match the pension, indexation, protection at death and value left to the children under several scenarios.
The decision
If the transfer suits you, I open the LIRA in segregated funds with the chosen insurer and we designate your beneficiaries together.
Sources: Retraite Québec, "In the event of death" (defined benefit plans), "Transfer to a LIRA or a LIF" and "Transfer of benefits" (defined contribution plans), consulted on 3 November 2026. General information: the exact rules depend on your plan and your statement. Your advisor is not a tax specialist; consult a tax specialist or a notary for estate matters as needed.
Frequently asked questions
Can I transfer my plan while I still work for the employer?
Generally not. A transfer is offered when your plan membership ends, under the terms of your plan and the law that governs it.
What will my children receive if I keep the pension?
After both parents have died, generally little or nothing, unless the form of pension includes a guarantee period that has not ended.
What will my children receive if I transfer to a LIRA or LIF?
The account balance at death, after tax, is paid to your beneficiaries or heirs, if the spouse is not entitled to it or has waived it.
Is a transfer always a good idea?
No. For someone who wants a guaranteed lifetime income above all, especially if the pension is indexed, keeping the pension may be better. That is why I compare both options before any decision.
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