Pension protection in Bankruptcy

The financial landscape is different than it was several years ago. Interest rates are going up, and many families are tightening their budgets. What happens if you can’t make ends meet and declare bankruptcy? Does this impact your retirement savings?

We can’t predict the future, but we can learn more about our financial options.

The good news: if you declare bankruptcy, your Registered Retirement Savings Plans (RRSP), registered company pension plans (RPP), and Locked-In Retirement Accounts (LIRA) can’t be seized. The income you receive from your exempt accounts will be included to determine the income threshold for the bankruptcy.  However, you will receive the income to keep supporting yourself!

Canada Pension Plan (CPP) and Old Age Security (OAS) are also protected. Assets that aren’t protected include Tax Free Saving Accounts (TFSA) or rental properties.

That means your MEPP pension is safe from seizure. This can be a difficult conversation to have. It’s important to know your retirement savings have protection in bankruptcy.

If you still have questions about your MEPP pension, our Pension Investment Officers and Retirement Information Consultants are a call away.