Some provinces allow the "unlocking" of all or a portion of
a LIRA, LIF or LRIF under certain circumstances. Some of the circumstances
small balances in the account, under a specified
becoming non-resident of Canada
shortened life expectancy
spousal or child maintenance enforcement orders
Some provinces allow the "unlocking" of all or
a portion of a locked-in account without the above restrictions. For information by province,
follow the links to your pension plan regulator, in the
table of RPP regulators, or the following links:
From January 1, 2011 to April 30,
2012, owners of Old LIFs and LRIFs will
have a one-time opportunity to withdraw in cash or transfer to an
RRSP or RRIF up to 50% of the total market value of the assets of
the fund. See the following FSCO information on
Under some circumstances, when your employment with
the pension plan provider ends, it may be possible to have your plan paid
out instead of being transferred to a locked-in account, if the value in
the plan is low, or if you have a shortened life expectancy. Check
with your plan administrator.
If your federally-regulated pension plans has been
transferred to a:
locked-in Life Income Fund (LIF); or
Restricted Life Income Fund (RLIF)
then the following unlocking provisions are available:
Small balance unlocking
Individuals 55 or over with LIF holdings of less than 50% of the
Yearly Maximum Pensionable Earnings (YMPE,
50% = $25,550 in 2013) will be able to wind up their accounts with the option to
convert to a tax-deferred savings vehicle, such as an RRSP or RRIF.
One-time 50% unlocking
Individuals 55 or older will be entitled to a
one-time conversion of up to 50% of holdings value into a tax-deferred
savings vehicle with no maximum withdrawal limits.
Financial hardship unlocking
The amount that can be unlocked is:
Low income - the amount is based on the expected income (line 236
on your tax return) for the year, and varies from a withdrawal of
50% of the YMPE (50% = $25,550 for 2013) for $0 in expected income,
to no withdrawal allowed when expected income is 75% of the YMPE
(75% = $38,325 for 2013)
High medical or disability related costs - the amount of medical
expenses can be unlocked, up to a maximum of 50% of the YMPE, as
long as medical expenses exceed 20% of the YMPE (20% = $10,220 for
2013). The medical expenses can include expenses of the plan
holder or others, including a spouse or dependant.
If you are no longer employed by the employer from
which the pension funds originated, and you have been a non-resident of
Canada for at least 2 consecutive years, then you can unlock the total
value of your plan funds.
Shortened life expectancy unlocking
If a physician has certified that you have a
shortened life expectancy due to a physical or mental disability, then
the total value of your plan funds can be unlocked.
yearly maximum pensionable earnings (YMPE), is the maximum amount on
which contributions to the Canada Pension Plan (CPP) are based.
Thresholds which are based on the YMPE will change each year as the YMPE changes. See the CPP/EI
page for the YMPE.
Note that the unlocking of these funds will lose the
protection from creditors provided to locked-in funds.
The Office of
the Superintendent of Financial Institutions Canada information on Pension
Unlocking provides more information on federally-regulated pension plans.
The information on this site is not intended to be a
substitute for professional advice. Each person's situation differs, and
a professional advisor can assist you in using the information on this web
site to your best advantage.
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