Stellantis Pension: What You Need to Know About Moving Your Retirement Funds

If you’re a Stellantis (Fiat Chrysler) employee or retiree, you now have more control over your pension than ever before. Recent changes mean you can move your pension out of your employer’s plan—but what does that really mean for you?

Making the right decision about your commuted value, tax implications, and investment options is critical. Should you take the company pension? Transfer your funds into an investment portfolio? Or opt for a copycat pension that mimics your current plan?

This article breaks it all down so you can make the best choice for your retirement.

Understanding Your Stellantis Pension Options

Your pension isn’t just a paycheck waiting for you at retirement—it’s an asset. And now, you don’t have to leave it tied to your employer’s plan if you’d rather take control.

Here are the three primary options available to you:

1. Stick with the Company Pension – Keep your money in the employer-sponsored plan and receive a set monthly payout in retirement.
2. Take the Commuted Value – Withdraw the lump sum and invest it yourself.
3. Buy a Copycat Pension – Move your pension to a Canadian insurance company and receive guaranteed payments.

Each choice comes with risks and benefits, and the right move depends on your personal financial situation. Let’s break them down one by one.

Option 1: Staying with the Company Pension

The most straightforward option is keeping your pension with Stellantis. You retire, and the company sends you a fixed amount every month for life.

Pros of Keeping the Company Pension

✅ Guaranteed Lifetime Income – No market risk, no investment headaches. You get the same amount every month.
✅ No Management Required – The employer handles everything, and you just receive your payments.
✅ Survivor Benefits – If your plan offers it, your spouse may continue to receive payments after your passing.

Cons of Keeping the Company Pension

❌ Lack of Control – You don’t have access to your money beyond the monthly payouts.
❌ No Inheritance – If you pass away early and your spouse isn’t covered, the pension may disappear.
❌ Company Stability Matters – If the company faces financial issues, your pension could be affected.

If you value security and don’t want to manage investments, this option could be a good fit. But if you want more flexibility with your retirement funds, you might consider moving your pension.

Option 2: Taking the Commuted Value

A commuted value is a lump sum payout of your pension. Instead of waiting for monthly checks, you take a large sum upfront and decide how to use it.

For Stellantis employees, this could mean hundreds of thousands of dollars (or more) in a one-time transfer.

How the Commuted Value Works

When you commute your pension, your funds are split into two parts:

• Locked-In Retirement Account (LIRA) – A portion of your pension can be transferred tax-free into a LIRA, where it continues to grow.
• Cash Payout – The remaining amount is given to you as taxable income.

Example: If your commuted value is $700,000, the government might allow $500,000 to be transferred to a LIRA, while the remaining $200,000 is given to you in cash (and taxed).

Pros of Taking the Commuted Value

✅ Full Control Over Your Money – You manage how and when you withdraw funds.
✅ Potential for Growth – If invested wisely, the money could grow beyond what the company pension would have paid.
✅ Inheritance Benefits – If you pass away, your remaining funds go to your family.

Cons of Taking the Commuted Value

❌ Market Risk – If investments don’t perform well, your money could run out.
❌ Requires Investment Knowledge – Managing a portfolio isn’t for everyone.
❌ Immediate Tax Hit – The portion paid as cash is subject to income tax.

Taking the commuted value is a strong option if you want investment flexibility and legacy planning, but you need to manage the risk carefully.

Option 3: Buying a Copycat Pension

A copycat pension is an alternative for those who like the idea of a monthly income but don’t want to leave their pension with Stellantis.

Here’s how it works: You take your commuted value and transfer it to a Canadian insurance company like Manulife, Sun Life, or Canada Life or Desjardins. In return, they pay you a guaranteed monthly pension—just like your employer would.

Pros of a Copycat Pension

Your pension is moved out of your employer. If you are worried about the auto industry, move your pension to the financial industry.

✅ Guaranteed Payments for Life – Just like the company pension, but managed by a private insurer.

✅ Potential Bonus Payout – Sometimes, these plans offer extra cash (e.g., 5% more than your company pension). Average $25,000 which goes to you as a cash surplus payment. Most often, the insurance company needs less cash than the company pension offers.
✅ Survivor Benefits – You can structure the plan so your spouse continues receiving income.

Cons of a Copycat Pension

Essentially, the downside of this is that you take your pension so, just as with the company pension you lose:

❌ No Investment Flexibility – Your funds are locked into the pension plan.
❌ Can’t Access Large Sums – You get monthly payments but can’t withdraw a lump sum later.

This option is ideal for those who want stable retirement income but would rather trust an insurance company over their former employer.

What About Taxes?

One of the biggest concerns with commuting your pension is tax liability.

• LIRA Transfers Are Tax-Free – The portion that goes into your Locked-In Retirement Account is safe from taxes.
• Cash Payouts Are Taxed – Any amount that isn’t eligible for a LIRA transfer is considered income and taxed accordingly.

How to Reduce the Tax Impact

• RRSP Contribution Room – If you have unused RRSP space, you can shelter some of the taxable payout.
• Tax-Efficient Withdrawals – Spreading withdrawals over multiple years may lower your tax bill, if you can.
• Spousal RRSP – This will not spare you income tax on transfer BUT you can deposit some of your cash surplus to your partner’s RRSP which will reduce his / her taxes. So, the family wins.
• Work with a Financial Planner – An expert can help optimize your tax strategy.

Which Option Is Best for You?

• If you want simplicity → Stick with the company pension.
• If you want control and investment growth → Take the commuted value.
• If you want guaranteed income with a trusted financial institution → Buy a copycat pension.

Each option has trade-offs, so it’s critical to assess your long-term financial goals before making a decision.

If you’re a Stellantis (Fiat Chrysler) employee, this is a major financial decision that could impact the rest of your life. Whether you choose to stay with the company pension, take the commuted value, or buy a copycat pension, it’s important to understand the risks, benefits, and tax implications before making a move.

Your retirement is in your hands, and with the right planning, you can maximize your benefits and ensure financial security for years to come.

Need help making sense of your pension options? Consult a Certified Financial Planner with Pension Solutions Canada. Click here.