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Financial Planning -> Pensions -> Registered Pension Plans (RPPs) - Locked-in retirement accounts (LIRAs)

Locked-in retirement accounts (LIRAs) - also known as locked-in RRSPs

When an employee has terminated employment and was a member of a registered pension plan, any funds due to the employee under that plan may be transferred to a LIRA. A LIRA is the same as an RRSP, except that the funds are locked-in. Withdrawals may not be made from a LIRA. By the end of the year in which the taxpayer turns 71, a LIRA must be transferred to one of the following:

life annuity

provides regular periodic payments for life, depending on the purchaser's (and perhaps their spouse's) age and sex, and current interest rates

life income fund (LIF)

allows control over investments in the account, and is subject to minimum and maximum annual withdrawals

locked-in retirement income fund (LRIF)

allows control over investments in the account, and is subject to minimum and maximum annual withdrawals

Federal or provincial pension legislation defines the minimum age at which a LIRA can be transferred to a life annuity, LIF or LRIF.

Mandatory conversion to life annuity

In some provinces, the LIF or LRIF must be converted to a life annuity at a certain age (usually 80). For LIFs and LRIFs under federal jurisdiction, this is no longer required.

See the article Unlocking your locked-in pension accounts, which includes information on the 2008 Federal Budget changes regarding federally-regulated pension plans.

Revised: April 28, 2013

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