Retraite Québec 
     
     
     
 

  Home > Life events > Leaving your job > You are going to work for an employer who does not offer any pension plan


When you leave your job, you are under 55 years old and have 2 or more years of service, but less than 35

Plans concerned: The RREGOP and the PPMP


Here are answers to questions often asked by people who leave their job to go work for an employer who does not offer any pension plan.

Click on the topic of your choice:

 

Refund of your Contributions

If I leave my job, can I obtain a refund of my contributions?

No. You are not entitled to a refund of your contributions because you have 2 or more years of service.

However, since 1 January 1996, people who leave their job and are not entitled to a refund of their contributions or to an immediate pension have 2 options available to them:

 

Deferred Pension

I know that I cannot obtain a refund of my contributions and that I am not eligible for an immediate pension. When will I be entitled to a retirement pension under my plan?

Since you are under 55 years of age and have accrued 2 or more years of service, but less than 35 when you stop working, you are not eligible for an immediate pension. However, your pension plan provides for payment of a deferred pension as of age 65. The pension will be fully indexed between the date your employment ends and the date your pension payments begin. Note that your pension will be integrated with the Québec Pension Plan (QPP) as of the month following your 65th birthday. In addition, if the actuarial value of your deferred pension is lower than the total of your contributions with interest, the amount of your pension will be increased until the actuarial value of that pension is equal to the contributions you have paid, plus interest.

For further information on integration with the Québec Pension Plan, please refer to the following document:

Can I receive the deferred pension before I turn 65?

Yes. You may request the advance payment of your deferred pension when you turn 55 or at any other time between your 55th and 65th birthdays. In that case, your pension will immediately be integrated with the Québec Pension Plan.

Since you will receive your deferred pension for a longer period than you would have had you waited until age 65 to apply for it, your basic pension will be reduced permanently. The reduction will be 4% a year (0.33% a month) between the date of your first pension payment and your 65th birthday. Note that, for the RREGOP and the PPMP, the reduction will increase to 6% per year as of 1 July 2020.

 

Transfer of the Amounts Accrued in Your Plan to a Locked-in Retirement Account (LIRA) or a Life Income Fund (LIF)

I am 28 years old and have 6 years of service. I know that I cannot obtain a refund of my contributions and that I am not eligible for an immediate pension. Is there any way I can recover the value of the benefits accrued in my pension plan?

You can ask us to transfer the value of the benefits accrued in your pension plan to a Locked-in Retirement Account (LIRA) or a Life Income Fund (LIF).

That value corresponds to the higher of the 2 following amounts:

  • the actuarial value of your deferred pension, up to the tax limits stated in the Income Tax Act; or
  • the total contributions paid in your pension plan, plus the accrued interests.

 

If applicable, will be added to that amount:

  • the pension credit’s actuarial value you have acquired.

What is a Locked-in Retirement Account (LIRA)?

A Locked-in Retirement Account (LIRA) is a special Registered Retirement Savings Plan (RRSP) into which you can transfer the funds from your pension plan.

Unlike the funds accumulated in an RRSP, the money in a LIRA is locked-in, since it must be used as a retirement income through the purchase of a life annuity or through the transfer to a Life Income Fund (LIF). Typically, you cannot withdraw the funds transferred to your LIRA before retiring.

And what is a Life Income Fund (LIF)?

A Life Income Fund (LIF) is a special Registered Retirement Income Fund (RRIF) into which you can transfer the funds from your pension plan and from which your pension benefits are paid.

Unlike a RRIF, which provides a minimum annual withdrawal, the LIF allows a maximum withdrawal each year.

What will happen if the actuarial value of my deferred pension exceeds the maximum amount that can be transferred, in compliance with the limits set under the Income Tax Act?

If there is a surplus, we will repay it to you by cheque, after having deducted the income tax required. Then, you can contribute as you wish to your RRSP, depending on its deduction limit, in order to recover part or the entire amount deducted. To know the amount of your RRSP deduction limit, you can refer to your latest Notice of Assessment issued by the Canada Revenue Agency.

What do I have to do so that you transfer the amount to which I am entitled to a LIRA or a LIF?

We wish to point out that you must wait at least 210 days after resigning to request that the amount be transferred. At the end of that period you must complete the form Application for a Retirement Pension This link will open in a new window. PDF. (RSP-079A) and send it to us before your 55th birthday or within 12 months following the date of the end of your employment if you resigned between your 54th and 55th birthday.

Once you have completed and sent us your Application for a Retirement Pension This link will open in a new window. PDF. (RSP-079A) form, you will receive a document called Your Options with a Reply-Form. It is the choice of benefits offered to you. You must fill it out and send it to us within 30 days following its receipt.

What will happen if I return to work in the public or parapublic sector after I have my pension fund transferred to a LIRA?

If you wish, you can have your pension plan recognize the periods of service that were credited to you before you had your pension fund transferred to a LIRA or a LIF.

For each period, you will then have to repay us the amount that was originally transferred to your LIRA or LIF, with interest accrued, at the rate of return of your pension plan. If applicable, you will also have to pay the amounts that were reimbursed to you directly since they could not be transferred to a LIRA or a LIF, because of a payable amount exceeding the fiscal limit. By doing so, you will restore the rights you had under your pension plan at the time of the transfer both for your recognized years of service and your accumulated funds.

Note that you must have held your new employment for at least 3 months before you can do this.

Can I choose to leave my pension plan contributions with your organization?

Yes. Interests will then be added to the funds accumulated in your pension plan until you decide to receive your deferred pension or transfer those amounts to an LIRA or an LIF before your 55th birthday.

Note that the interest rates for the RREGOP and the PPMP are set on 1 June of each year. For the period of 1 June 2020 to 31 May 2021, the interest rate for the RREGOP is 7.73% and that for the PPMP, 7.53%.

 

Useful Forms

You must fill out the following form to apply for a deferred pension when you decide to retire:

 

Fill out these forms to apply for a transfer of your pension funds to a Locked-in Retirement Account (LIRA) or a Life Income Fund (LIF):

 

Useful Link

 

To Learn More About Your Public-Sector Pension Plan