Decoding Your Final Pension Statement When You Retire in Canada

Ah, the golden ticket to your golden years. Your Final Pension Statement. It’s far more than just a piece of paper; it’s the key to unlocking the door to a secure and comfortable retirement. Don’t be fooled by its nondescript name. This document is your gateway to understanding the true worth of your life’s work, and how to best utilize it for a fulfilling retirement lifestyle.

Why the Final Pension Statement Matters

Upon retirement, you’ll be handed this statement, essentially a snapshot of your pension’s value. With ever-fluctuating bond rates, it’s imperative to have this concrete figure (the commuted value) in hand. It’s not just a number; it’s the start of your next financial chapter. With it, you can:

  1. Collaborate with your Certified Financial Planner to chart the road ahead.
  2. Explore the waters of a Copycat Annuity from a Canadian financial institution – which might just toss some bonus cash your way.
  3. Understand your options clearly, as many plans adjust the commuted value based on your retirement age.

If a lump sum payment is on the horizon, your statement is the “rosetta stone” that unveils whether you should opt for that lump sum or stick to the monthly income. Remember: bond yields up : commuted value down. It’s a teeter totter.

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The Anatomy of a Final Pension Statement

Often termed as the final transfer or final pension options, the Final Pension Statement is a goldmine of information about your pension plan. Opting for a lump sum or transferring your pension elsewhere? This statement ensures you’re not leaving any entitled benefits on the table.

Here’s what you’ll typically find in it:

  • Years of Service: The duration you’ve been a part of the plan.
  • Calculation Base Salary: The salary figure used to determine your plan entitlements, often final 5 or best 5 years.
  • Total Benefits Value: A cumulative dollar value of all the benefits you’ve amassed in the plan till the date specified.
  • Commuted Value: The money shot – the total dollar amount representing your pension’s present value. This will include locked-in money [LIRA] combined with some taxable cash.

In essence, a Final Pension Statement is a key document that holds a wealth of information about your pension plan. It provides an insightful peek into your financial future and helps ensure you are fully aware of your assets before making any pivotal decisions.

Keep The Company Pension Or Move It Out?

Now that you know exactly what pension benefits you have, you have an important decision to make… Do you leave the money with your current employer’s pension plan and trust them with it? Or, do you move the money out of the company pension plan.


Do nothing. Leave your pension with the company. If you do this, your retirement benefit stays locked in with the company. Will your company be there on your 80th birthday? Are they in good financial strength?

Ask yourself, in 30 years is the company still going to be in business and employing people to contribute to my pension? Who will be putting money into your pension so you can take it out?

If you decide to go this route, ask the pension plan administrator if there are increased administration fees, because some companies will no longer give you the discounted ‘group’ rate. This may apply to DC [defined contribution] plans.


The copycat annuity (also known as a “mirror annuity”) is a popular choice for employees coming out of a defined benefit pension plan [DB]. It allows you to receive the same pension that your employer promised you, but it gets paid out by a secure Canadian insurer instead of the company you worked for.

Sun Life, Canada Life and Desjardins will bid on your pension. The Canadian insurance company you choose will pay you the exact same pension, same bridge and the same spousal pension.

Plus, sometimes your company’s pension has a surplus and the Canadian insurance company may pay you your pension plus extra cash. We’ve seen bonus cash payouts as high as $72,000. You might qualify.


Taking the cash is known as the commuted value. You’re able to move the money out of the company pension plan so it can be self-managed by you.

Your employer cuts 2 cheques to you, one is locked in pension money, the other is cash.

Watch out for the government tax grab. That’s called the MTV, maximum transfer value. Use your RRSP room. But beyond that, this is your money. Use it for retirement or to pay off your mortgage or buy a boat or RV. Take a trip. The rest is your estate.

Keep in mind that if you choose this option, you’ll want to make sure to contact a financial planner to help you invest your funds so that you’ll have enough money to last you for the rest of your life. We can help! Schedule a 15-minute call with one of our Certified Financial Planners.

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