What to Do With Your Group
Retirement Savings When You Leave
Leaving an employer is one of the busiest moments in a professional's life. The retirement savings plan you built up over the years rarely gets the attention it deserves — and the default decision is often no decision at all.
Our founder, William Chan, wrote this piece during his own transition — leaving a corporate career to build Modern Vision Planning as an independent financial advisory practice. It is offered for the many professionals who find themselves in a similar position: holding a group retirement account from a former employer and unsure what to do next.
The Decision Most People Postpone
When you leave an employer, the group retirement savings plan you participated in rarely tops the priority list. There are references to collect, new routines to settle into, and often a new role or venture demanding your full attention. What tends to happen is this: someone from HR or the plan administrator explains the options briefly, you make a quick choice, and then the account is largely forgotten.
The challenge is that group retirement plans — whether structured as a Group RRSP, a Deferred Profit Sharing Plan, or another registered arrangement — can vary significantly in how they are set up. Rather than get into the technical differences between plan types, the more useful question is simply this: once you have left, what are your options, and what does each one actually mean for you?
The Four Options — And What Each One Costs You
There are four paths available to most people leaving an employer plan. None of them is universally the right answer — the best choice depends on your situation — but each carries trade-offs worth understanding clearly.
Option 1
Leave It With the Existing Group Plan Provider
This is the path of least resistance, and it is the one most people take. When you are no longer an active plan member, your account is typically moved from the employer's group plan into an individual account held under the same group administrator. The practical consequences are worth knowing: fees often increase once you lose the pricing that came with being part of a larger group. Investment selection tends to be limited compared to a personally held account. And because the account is now tucked away somewhere outside your daily financial picture, it is easy to stop monitoring it altogether. The money does not disappear — but it can quietly underperform for years without anyone noticing.
Option 2
Registered Transfer to a New Employer Plan
If your next employer offers a group retirement plan, you may be able to transfer your existing savings directly into it as a registered transfer — meaning no tax is triggered on the move. This keeps the money consolidated and active within a plan. The limitation is the same one that applies to most group arrangements: the investment menu is determined by the plan sponsor, not by you, and the management style is generally self-directed without professional guidance built in. It is a reasonable option if the new plan is well-structured, but it does not solve the underlying question of whether the money is actually being managed with your broader goals in mind.
Option 3
Registered Transfer to a Personally Held Account
A registered transfer to an individually held RRSP — or equivalent registered account — brings the funds into your own hands without triggering tax. This option opens up the full range of investment choices available through whichever institution or advisor you work with, and it allows the savings to be managed alongside the rest of your financial plan rather than in isolation. The costs involved are the standard investment fees in your personal account, plus whatever transfer-out fee the group plan charges, which varies by provider. Whether this is the right move also depends on who will be managing the account once it arrives — which makes the quality of that relationship matter as much as the mechanics of the transfer itself.
Option 4
Cash It Out
Withdrawing the funds as cash is the one option that comes with immediate and lasting consequences. The full amount withdrawn is added to your taxable income for the year, which can push you into a higher bracket and result in a significant tax bill. Beyond the tax hit, you permanently lose the RRSP contribution room that those savings occupied — room that cannot be reclaimed later. There is also an important detail many people overlook: the portion of the account funded by employer matching contributions may not be available for cash withdrawal at all, depending on how the plan was structured. In most circumstances, cashing out is the least efficient path, and it is worth exhausting the other three options before considering it.
The Mistake That Matters Most
Across all four options, the pattern that tends to do the most long-term damage is not making the wrong choice — it is making no deliberate choice at all. A transition out of employment is almost always a busy period, and most people gravitate toward whatever requires the least effort in the moment. The group plan stays where it is, the account gets overlooked, and years pass without anyone reviewing whether the investment strategy inside it still makes sense for a person's age, timeline, or goals.
The money accumulated in a group retirement plan represents real savings that took real time to build. It deserves the same level of attention as the other financial decisions a person makes during a career transition. A conversation with a qualified financial professional — one who is not tied to any particular product or provider — can help clarify which path fits your actual situation, rather than which one is simply the easiest to take.
"The biggest mistake is not choosing the wrong option — it is leaving the account on its own and never looking at it again. These savings took years to build. They deserve a deliberate plan."
— William Chan, Founder · Modern Vision Planning
If you are navigating a job change — or if you have an old group plan you have never revisited — a conversation is a good place to start.
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