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Financial Planning   ->   Pensions   ->   Registered Pension Plans (RPPs)   ->   Locked-in Retirement Accounts (LIRAs)

Locked-in Retirement Accounts (LIRAs)

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 locked-in retirement account.  This type of account is also known as a locked-in RRSP.  Withdrawals may not be made before being transferred to a RRIF-type retirement account, except in limited circumstances.

LIRAs and locked-in RRIFs are taxed in the same way as regular RRSPs and RRIFs.

By the end of the year in which the taxpayer turns 71, the LIRA must be transferred to one of the following:

bulletlife annuity
bulletprovides regular periodic payments for life, depending on the purchaser's (and perhaps their spouse's) age and sex, and current interest rates
bulletlife income fund (LIF)
bulletallows control over investments in the account, and is subject to minimum and maximum annual withdrawals
bulletlocked-in retirement income fund (LRIF)
bulletallows 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/locked-in RRSP can be transferred to a life annuity, LIF or LRIF.

Provincially regulated Locked-in RRIF-type retirement accounts include LIFs, LRIFs or Prescribed RRIFs (PRRIFs - Saskatchewan and Manitoba).

Federally regulated locked-in RRIF-type retirement accounts include LIFs, LRIFs, restricted locked in savings plans and locked-in RRSPs.

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: October 26, 2023


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