Retirement or termination of employment
What happens if I retire or terminate my employment with less than two years of continuous service?
If you retire or terminate your employment with less than two years of continuous service, you will be entitled to
- a lump-sum payment of your DC and VSP account balances including Canada Post’s contributions and accumulated investment earnings, less applicable taxes; or
- the transfer of your DC and VSP account balances to a personal RRSP.
What happens if I retire or terminate my employment with two or more years of continuous service?
The balance in your DC account is locked-in and can only be used to provide retirement income. You may convert your account balance into retirement income by
- purchasing an annuity from an insurance company;
- transferring your account balance, including Canada Post’s contributions and accumulated investment earnings, to a locked-in registered retirement savings plan (RRSP), a life income fund (LIF) or a registered retirement income fund (RRIF); or
- leaving the balance in your DC retirement account in the Plan until the legislated maximum retirement age, at the latest. If you choose this option, you will be responsible for paying all fees related to your account.
The balance in your VSP account will be paid to you as a lump sum, minus applicable taxes. You may also transfer it into a personal RRSP including the Group Choices Plan offered by Sun Life Financial.
Are my DC account funds locked in?
The funds in your DC account are not locked in if you:
- terminate your employment with less than two years of continuous service; or
- the value of the total pension benefits from the Plan is less than 20% of the Year’s Maximum Pensionable Earnings (YMPE) amount.
Otherwise, the funds in your DC account are locked-in and can generally only be used as retirement income.
Your VSP account is not locked in.