Help with Non-Vested "defined contribution pension plan"

Hi Everyone,

I am hoping someone can help me out. I recently left my company before 2 years and lost my vested "defined contribution pension plan" bastards. I now have about 7K in a non-vested "defined contribution pension plan" and have been reading I can take it as cash. Just wondering if I pay tax in this amount if I do take it out in cash. If I transfer it to a RRSP can i use it in my taxes this year?

What is my best option.
Thanks T 

I think you have it backwards. Vesting means you are entitled to it. The pension amount you lost when you left your job is non-vested. So if the 7K you have now, you get if you quit, it is considered vested. In terms of cashing out, you can only do so if it is not locked in. If its locked in, you can transfer it into a LIRA. 

You are correct both are non-vested. If I cash out will I have to pay taxes? If I decide to place it in a rrsp can I put that on my taxes? 

Ok, I think I get what your situation is, correct me if I am wrong. You recently quit and you lost your employer contributions into the pension, the 7K that you have are your contributions. The 7K is most probably non-locked in because it was less than 2 years.

Your pension contributions are already in a tax sheltered account. If you cash out you will pay taxes on it. And if you end up putting into an RRSP you will get a deduction. Be aware that the tax credit you get from the RRSP contribution may be less than the taxes you owe on the amount, depending on what your personal income tax rate is.

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How long did you have to go before you hit the two year mark? Do you know how much you lost from the employer's side of the contribution? Anyway.....

You got a tax deduction when you put your portion of the contribution in the plan. If you take your contributions out in cash, then you have to pay income tax on the withdrawal.

You should be able to transfer the funds to your RRSP on a tax free basis. Talk to your RRSP provider, they should know about the forms to use. Note - you don't get an additional deduction for the RRSP contribution, you already got the deduction when you put the money in the pension plan.

I would not suggest taking the cash, you will lose money as you will pay income tax at your marginal rate. Not only have you unfortunately lost all of your employer's contributions to the PP on your behalf, you'll also have lost tax dollars.