- A locked-in retirement savings arrangement is an approved financial product that is designed to provide a gradual income in retirement. Locked-in retirement savings arrangements include:
- Locked-In Retirement Account (LIRA) – a type of registered retirement savings plan (RRSP) into which a person can transfer locked-in amounts originating from a pension plan. Unlike a regular RRSP, the amounts in a LIRA are locked-in and cannot be access until the owner reaches retirement age except in certain circumstances, as referenced below.
- Life Income Fund (LIF) – a type of registered retirement income fund (RRIF) into which a person can transfer locked-in amounts originating from a pension plan. Money can only be transferred into a LIF once the owner reaches retirement age and withdrawals can be made each year based on a prescribed maximum percentage. Other circumstances, as referenced below, may allow additional money to be withdrawn.
Locked-in Retirement Income Fund (LRIF) – a type of registered retirement income fund (RRIF) into which a person can transfer locked-in amounts originating from a pension plan. Money can only be transferred into a LRIF once the owner reaches retirement age and withdrawals can be made each year up to a maximum amount. A LRIF is very similar to a LIF except that the maximum is based on investment income in the previous year. Other circumstances, as referenced below, may allow additional money to be withdrawn.
- The term “locked-in” is used to describe the restrictions on when (i.e. what age) and how much of a pension benefit can be accessed annually as enacted in legislation. The purpose of locking-in is to help ensure the availability of pension income during retirement, including for a surviving spouse or cohabiting partner of the pensioner.
- The rules for a financial institution on setting up an acceptable locked-in retirement savings arrangement are explained in Directives from the Superintendent and can be accessed through the links below:
- Locked-in retirement savings arrangement approved by the Superintendent in accordance with applicable directives can be accessed through the lists included in the links below:
- In accordance with the Superintendent’ directive for a Life Income Fund (LIF), there is an annual maximum for withdrawals from a LIF, based on age. The respective maximum by age for the current and preceding year are included in the links below:
- There are specific rules that allow owners to unlock money from a locked-in retirement savings arrangement. General information on unlocking can be found here. Information on financial hardship unlocking can be found here. For specific information related to your own circumstances and your retirement savings arrangement, please refer to your contract with your financial institution or contact your financial institution.