Transfer in Existing RRSPs
Did you know that you have the option of transferring any amount from a personal Registered Retirement Savings Plan (RRSP) or Locked-In Retirement Account (LIRA) to the McGill University Pension Plan?
Although this opportunity may not be suitable for everyone, it may be of interest to individuals looking to consolidate their registered plan holdings, increase their exposure to the investment fund options offered under the McGill University Pension Plan, or to those who would potentially like to lower their investment management fees.
Your Pension Plan Accounts
Amounts transferred from an RRSP into the McGill University Pension Plan are held in an unrestricted Additional Voluntary Contribution (AVC) Account whereas, amounts transferred from a LIRA are held in a restricted AVC Account.
You may view your personal pension account information on the web at any time and you may also track the value of your holdings using the annual member statement that is mailed to you every year.
Withdrawing funds from the Additional Voluntary Contribution Account
You are cautioned that savings in your restricted and unrestricted AVC Account may not be withdrawn or transferred while you are employed at McGill. Withdrawals under the Home Buyers’ Plan and Lifelong Learning Plan are not eligible through the McGill Pension Plan.
Options at retirement and/or termination
At the time of retirement and/or termination, unrestricted funds held in the AVC account may be received as a cash payment (less withholding tax), transferred to an RRSP, or used to buy an annuity.
Restricted funds are subject to locking-in provisions and as such, may not be withdrawn in cash and may only be used to provide a retirement income. Additional information may be found in the Pension Plan brochures.
The McGill University Pension Plan does not charge any fees for accepting transfers from an RRSP or LIRA; however the institution transferring-out funds may levy a transaction or cheque issuance fee. In addition, you may also incur other charges when disposing of certain investment types. For instance, when you redeem a deferred sales charge fund, you will be required to pay any applicable redemption fees and the early redemption of term deposits / guaranteed investment certificates may result in a market value adjustment being applied to the value of your account. It is recommended that you verify such matters with your RRSP/LIRA carrier prior to making any decisions.
How to Proceed
If interested please advise the HR Service Centre at 514-398-4747 who will send you a partially completed T-2033 form that must subsequently be forwarded to your current RRSP/LIRA carrier. You will also be required to provide investment direction for any transferred funds (as is the case with your existing McGill Pension Plan). Once the funds have been deposited in the McGill Pension Plan, written confirmation will be issued.
You may want to consider discussing this opportunity with an appropriately qualified financial advisor. Individual needs and circumstances vary significantly from person to person. As such, no one should rely solely on the information contained herein for the purpose of financial planning or for developing investment or retirement strategies.
For more information, please contact the HR Service Centre at 514-398-4747.