Judy Shapiro, aged 74, recently shared her experience of discovering forgotten retirement savings that she had accumulated during her early career in the 1970s. At that time, she was working on a children’s TV show called “What’s New” for the CBC and was a member of the ACTRA union, contributing to its retirement savings plan. Despite not being focused on financial success back then, she invested in an RRSP through the union. After leaving her job and the country, the paperwork for her retirement savings got misplaced for nearly four decades.
While going through old documents five years ago, Shapiro stumbled upon a form indicating an $8,000 investment in her RRSP during her time with ACTRA. Surprisingly, upon contacting ACTRA, she discovered that her initial investment had grown to over $100,000. Converting this account to a Registered Retirement Income Fund (RRIF) managed by the ACTRA Fraternal Benefit Society (AFBS) now provides Shapiro with an extra $650 monthly income.
Shapiro’s situation is not unique, as many Canadians lose track of their retirement savings over time. A report by the National Institute on Ageing revealed that in Ontario alone, around 200,000 individuals with registered pension plans are considered missing, leading to approximately $3.6 billion in unclaimed funds. Unfortunately, it can be challenging for pension plans to locate individuals who are owed significant amounts.
Sebastien Betermier, an associate professor of finance at McGill University, explained that the issue of forgotten retirement savings is common, especially among younger individuals who prioritize immediate financial needs over long-term retirement planning. Additionally, frequent job changes and address updates make it harder for pension plans to locate individuals, potentially leading to unclaimed funds.
Efforts are made by pension plans to reconnect with missing members, but privacy laws and outdated contact information often pose challenges. Organizations like OP Trust may involve the Canada Revenue Agency in locating missing pension holders, but misunderstandings or skepticism about such communications can hinder the process. Despite the bureaucratic hurdles, it is crucial for individuals to stay informed about their past employment and potential pension entitlements.
In conclusion, while the government may not prioritize the retrieval of forgotten pension funds due to their individual size, the collective impact remains significant. It is essential for individuals to proactively track their work history and retirement savings to avoid missing out on potential financial benefits in the future. Judy Shapiro’s story serves as a reminder that it’s never too late to reconnect with past employers and uncover any hidden retirement savings.