March 30, 2026

The original version of this article is available here

If you have recently been laid off from Bell Canada after several years of service, this message is for you.

Over the past two years, we have supported several people in this situation, and here are a few tips we would like to share with you.

First, take a break. What you are feeling is normal. However, the financial decisions you make in the coming weeks will be decisive.

Many Bell employees receive severance pay, along with several important decisions: pension plan, group savings, insurance, shares… These choices will have a direct impact on your long-term financial future.

Here are the key points to consider right away:

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1. Do not sign anything in haste

Severance offers are often accompanied by tight deadlines. However, depending on your seniority, your role, and your age, you may be entitled to more. Take the time to carefully review the offer.

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2. Understand your pension plan options (very important)

If you participated in a Defined Benefit Plan (which guarantees you retirement income based on your years of service), you generally have two main options:

• Leave the funds in place and receive a lifetime pension at retirement

• Transfer the plan’s commuted value to a locked-in account (CRI / FRV)

This is not only a financial decision; it is a risk-management decision. Life expectancy, interest rates, and your personal situation must be taken into account.

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3. Group RRSP / Defined Contribution Plan — do not forget it

If you contributed to a group RRSP or a defined contribution plan:

• Amounts in the group RRSP can generally be transferred to your personal RRSP

• Amounts in the DC plan can be transferred to a locked-in account (CRI)

Before taking action, it is essential to understand the fees, investment options, and the level of service offered.

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4. Share purchase plan (if applicable)

If you participated in a share purchase program:

• Confirm the vesting rules and timelines

• Determine whether it is preferable to hold or sell

• Selling shares may result in a taxable capital gain, or a capital loss that can be applied against prior gains (last 3 years) or future gains

• Assess concentration risk (often high for employees)

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5. Your group insurance coverage will end—prepare accordingly

Your coverage (life, disability, health, dental) will eventually end. You may have the option to:

• Convert certain coverages without medical evidence

• Put temporary or permanent coverage in place

Deadlines are strict; do not wait.

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6. The tax treatment of severance pay is crucial

The severance may be paid:

• As a lump sum (fully taxable)

• Or partly directed to an RRSP (if you have contribution room)

Please note: if you worked at Bell Canada before 1996, a portion of your severance may be transferred to your RRSP without affecting your contribution room. The calculation is as follows: ($2,000 × number of years of service before 1996) + ($1,500 × number of years of service before 1989)

A sound tax strategy can represent savings of several tens of thousands of dollars.

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7. Build a transition plan—not just a job search

This is a comprehensive financial transition. Cash flow, taxation, retirement horizon, coverage: everything must be reviewed. Ensure you have a solid financial plan.

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8. When you find a new job: optimize the new benefits

A new job comes with new important decisions:

• Pension plan: Understand the new plan (RRPD, RRCD, group RRSP, RPDB), maximize employer contributions, and optimize your participation from the outset.

• Group insurance: Review the coverage offered (life, disability, critical illness, health care, prescription drugs) and fill any gaps as needed.

• Tax and financial coordination: Align your new situation with your existing assets (RRSP, TFSA, CRI) to avoid inefficiencies.

• Savings strategy: Adjust your investment plan based on your new income and your objectives.

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This is a destabilizing time, especially after several years of loyalty to an employer. However, it is also one of the most important moments in your financial life.

If you have any doubts, do not leave room for improvisation—seek the help of a financial planner.

Because several of these decisions are irreversible.

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If you or someone close to you is in this situation, at Bell Canada or elsewhere, we are available to support you at every stage of this transition.

Mathieu Leduc, Pl. Fin.
President
Montclair Gestion Privée