Where to find your provincial regulations, which vary across Canada


When you leave an employer, any pension money in a registered plan will be transferred to a Locked-In Retirement Account (LIRA), or Locked-In Retirement Savings Plan (LRSP). Those funds are “locked in” and not available for use until you retire. There are exceptions, but these are tightly regulated. Here’s a look at the rules for locked-in retirement plans.

Under some circumstances, and depending on the province of residence, funds may be withdrawn early from locked-in plans, for example, to pay for medical expenses, accommodation, or retrofitting your residence due to an illness or disability. Funds may also be withdrawn in cases of shortened life expectancy or becoming a non-resident of Canada.

LIRA maturity options

When you retire or by the end of the year in which you turn 71, at the latest, you may roll over the funds in your LIRA into one or a combination of the following options:

* An immediate or deferred life annuity. An annuity is a contract offered by insurance companies that provides a guaranteed income stream for the duration of the annuity. Rates, payouts, and durations vary widely and the choices and alternatives can be bewildering.

* A Locked-in Retirement Income Fund, or LRIF (variations are available in Manitoba, Newfoundland, and Saskatchewan). An LRIF is similar to a Registered Retirement Income Fund, except that there is a limit on annual withdrawals as set out by the province of registration.

The earliest that you can purchase an LRIF is around age 55, but it could be earlier depending upon the retirement age specified in the terms of the pension plan. A certain amount must be paid out of an LRIF each year, except in the initial year of the LRIF. You may choose not to be paid any money in the first year, but you must begin receiving payments from the LRIF before December 31 of the following year.

These vehicles, or any combination of them, will help create a retirement income stream for you.

Unlocking possible for “financial hardship”

Locked-in plans can also be accessed in certain cases of financial hardship. In Ontario, for example, there are four categories of financial hardship: 1) low expected income; 2) payment of first and last months’ rent; 3) arrears of rent or debt secured on a principal residence (such as a mortgage); and 4) medical expenses.

The financial institution that administers your locked-in accounts will review your application to determine if it meets the requirements and if it approves, will make the payment.

Get more advice and information

Because the rules for locked-in accounts vary from province to province and can get quite complicated, it’s best to contact your pension administrator and ask them directly about your account. They will be able to tell you when you can start to withdraw money under your plan. Then consult a qualified financial advisor for rollover options that work best in your financial circumstances.

For general pension information, contact the government agency responsible for regulating pensions in your province:



robyn-k2by Castlemark Wealth Management For Her
Robyn K. Thompson, CFP, CIM, FCSI is founder of Castlemark Wealth Management Inc., a boutique financial advisory firm for high net worth clients, with special focus on the financial needs of women.