On August 6, 2025, mall retailer Claire’s Holdings LLC filed for Chapter 11 bankruptcy in the United States. At the same time, its Canadian affiliate sought protection under the Companies’ Creditors Arrangement Act (CCAA) before the Ontario Superior Court of Justice. While Claire’s stores across Canada remain open during restructuring, the long-term future of the brand — and its employees — is uncertain.
Bankruptcy filings often raise immediate concerns for workers, especially when it comes to pensions and retirement benefits. While wages and severance can be protected under labour laws and court orders, pensions are directly tied to the financial health of the employer’s plan.
Pension Risks in a Bankruptcy
When a company enters CCAA protection in Canada, pension plans come under scrutiny. Depending on funding levels, employees may face reduced benefits or find their pensions frozen. In some cases, retirees and active workers become unsecured creditors.
This is why many employees consider moving their pensions out of the employer’s plan when the opportunity arises. Options typically include:
- Commuted value transfer: Taking the lump-sum value of the DB pension and moving it into a locked-in retirement account.
- Copycat annuity: Purchasing an annuity from a Canadian insurer that replicates the employer pension, but with the backing of an insurance company instead of the retailer.
Lessons for Workers in Retail
Claire’s is the latest in a series of long-standing retail brands struggling against online competitors and shifting consumer habits. For employees in retail — an industry prone to restructuring and bankruptcy — relying solely on the company pension carries risk. Moving funds into a copycat annuity or transferring the commuted value can help safeguard retirement income from the uncertainties of corporate survival.
Book A Pension Consultation Call - Don't Delay!
Click the button below to book a consultation call with a Certified Financial Planner. With more than 25 years of experience, our approach is clear and practical. We help simplify pension, investment, retirement, estate, and tax planning so you can focus on what matters most. We've had the privilege of advising retirees and employees from organizations such as Ontario Teachers, Stelco, UPS, ArcelorMittal Dofasco, GM, and many others. Book a free 15-minute consultation call today.
What Comes Next
As Claire’s Canadian CCAA process unfolds, more information will become available about store closures, layoffs, and pension implications. Workers should closely review their pension statements and seek professional advice before making any decisions. The earlier options are reviewed, the greater the likelihood of protecting retirement income against the risks of employer bankruptcy.
