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Locked In Plans - LIRAs & LRSPs  

Transfers from Registered Pension Plans (RPPs)

LIRAs-LRSPsAll locked-in RSPs and LIRAs are transfers from Registered Pension Plans. Registered Pension Plans are plans set up by employers and unions to provide pension benefits to their employees and union members at retirement. Registered Pension Plans come in two different types of plans Defined Benefit Registered Pension Plans and Defined Contribution Registered Pension Plans. The employer or both employer and the employee make ongoing contributions to the plan.

Under pension laws, after a period of time (usually between two and five years after joining the plan), all money in the plan becomes fully vested to the employee or union member. In Ontario the employee is automatically vested in their defined contribution registered pension plan on all of the employer contribution on or after January 1, 1965. Once the vesting conditions have been met the employee or union member owns all the funds in their plan including the employer's contributions.

If you are a member of a Registered Pension Plan and are fully vested in your plan all transfers from the plan are 'locked in'. Depending on the type of Registered Pension Plan you have you can transfer your employer's or Union's Registered Pension Plan to your individual locked-in plan. Transfers can be made at any time even if you are still employed with the employer or union, or after you terminate employment or union membership.

Registered Pension Plans can only be transferred into the following types of locked-in plans:

Retirement Savings Plans

  1. Locked-in Retirement Account (LIRA) 

  2. Locked-in Retirement Savings Plan (LRSP)

Retirement Income Options

  1. Life Income Fund (LIF) 

  2. Locked-in Retirement Income Fund (LRIF) 

  3. Prescribed Retirement Income Fund (PRIF)

Option to Plan members after termination of Employment

The plan member has three options:

  1. Leave the accumulated funds in the plan; or 

  2. Transfer the accumulated funds to their individual locked-in plan, or

  3. Transfer the accumulated funds to purchase an annuity.

Registered Pension Plan Transfers to Locked-In Plans

The following are some of the considerations the plan member has to consider prior to transferring their Registered Pension Plan to an individual Locked-In Plan. As with all decisions there are advantages and disadvantages with each plan type. If you would like to discuss your options please contact us. A financial advisor will assist you make an informed decision. There is no cost for this service to the plan member. If the plan member decides to proceed with the transfer a financial advisor will get paid a commission and/or service fees. The plan member is under no obligation to utilize our services.

  • If you have a defined contribution pension plan this decision is much easier since there are no guarantees on the pension benefits at retirement by your employer. In most cases it is advantageous to transfer your defined contribution registered pension plan to your own locked-in plan. 

  • If you have a defined benefit registered pension plan this decision require more scrutiny to determine the most suitable option. One of the benefits of a defined benefit registered pension plan your pension is guaranteed. The employer has all the liability to manage the funds and to provide pension benefits at retirement. Many of these plans provide indexation of benefits at retirement and some provide a spousal benefit when you pass away. You can also delay receiving your pension until age 65. The biggest drawback is if both you and your spouse decease and there are funds left in the plan your children or your estate are not entitled to them. The unused funds remain in the employer's or union pension plan to fund other plan members retirement. The other drawback is that if a pension plan becomes insolvent you won't receive all of your benefits and may only receive a reduced amount at retirement.

  • If you opt out of your pension plan, you may forfeit other group benefits such as dental, health and life insurance coverage. Check with your existing plan before transferring funds to an individual locked-in plan.

  • When transferring your Registered Pension Plan to an individual locked-in plan you can benefit from additional tax deferral by delaying your retirement to age 71. With Registered Pension Plans you have to start receiving your pension at age 65.

  • Individual locked-in plans provide more flexibility for estate planning. Any remaining funds left in the plan when both you and your spouse die belong to you not the employer's or union's pension plan. You can name your children or your estate as beneficiaries on the plan they will receive your unused funds.

  • You can start your retirement early. Locked-in plans will allow for the plan to be converted into a LIF, LRIF or PRIF as early as age 55. You have the option for an early retirement to start withdrawals at age 55.

  • Some locked-in plans will allow for unlocking of pension plan assets. The allowable locked-in amount can be transferred to RRSPs or RRIFs. The plan holder can withdraw funds from their RRSPs or RRIFs at any time. 

  • RRSPs and RRIFs don't have the creditor protection provided with locked-in plans. When transferring locked-in assets to an RRSP or RRIF one has to take into consideration other factors such: as high levels of personal debt, litigation, the risk of personal bankruptcy. RRSPs and RRIFs can be seized by creditors. Annuities and segregated funds offer potential creditor protection similar to locked-in plans when a beneficiary within a prescribed class is named on the account.  

  • When transferring your Registered Pension Plan to an individual locked-in plan you are no longer restricted in your investment options. You can select eligible investments based on your personal financial objectives and risk tolerance. The added flexibility is of value. You also benefit from the services of a personal financial advisor.

Locked in Retirement Accounts (LIRAs) versus Locked in Retirement Savings Plans (LRSPs)

The applicable legislation governing your Registered Pension Plan is Provincial or Federal. This information is required to ensure the correct plan set up when transferring your Registered Pension Plan to an individual locked-in plan.

If the governing legislation is provincial, each province has its own rules for Registered Pension Plans. The governing legislation is determined by the jurisdiction where the plan originated from. Generally all locked-in plans share the same characteristics the money cannot be withdrawn until retirement.

Locked in Retirement Account (LIRA)

LIRAs are subject to provincial jurisdiction and regulations in the following Provinces:

  1. Alberta,

  2. Saskatchewan,

  3. Manitoba,

  4. Ontario,

  5. Quebec,

  6. New Brunswick,  

  7. Newfoundland.

Transfers of RPP to LIRA

In some cases when you terminate your employment prior to retirement your employer will automatically terminate your membership in their Registered Pension Plan. In this case the employee has to transfer their Registered Pension Plan's accumulated funds to a LIRA.

On Death

If the employee deceases prematurely prior to retirement, the funds will be transferred to the surviving spouse. In some cases the surviving spouse can remain in the existing plan or they may have to transfer the accumulated funds to their own LIRA.

Marriage Breakdown

In the event of a marriage breakdown or a common law partnership breakdown wherein one of the partners has an RPP, their plan will be considered as one of the assets and be subject to a division of assets. In this case one of the partners may be required to transfer a portion of the accumulated funds in their RPP to the other partners LIRA. The receiving partner will be subject to the same regulations as the plan from which the accumulated funds originated from. In most cases they will be required to keep the locked-in funds they received until retirement.

Workings of the Plan

Just like RRSPs a LIRA shares the same tax deferral benefits. The funds grow tax deferred until the accumulated funds in the plan are withdrawn. At retirement which can be as early as age 55 in all provinces where LIRAs are used, the plan holder has the option to transfer the funds to retirement income plans such as LIFs, LRIFs, PRIFs or purchase an annuity. This transfer is mandatory and has to be made by the plan holder by no later than age 71.

Locked In Retirement Savings Plans

In an LRSP the issuer signs an agreement with an employer to lock-in the pension until the employee's or plan member's retirement. Essentially both plans LIRAs and Locked in RSPs are the same. 

Locked in Retirement Savings Plans are regulated either by provincial or federal legislation. They are offered in the following provinces and territories as well as federally regulated plans.

  1. British Columbia,

  2. Nova Scotia,

  3. Prince Edward Island,

  4. Yukon,

  5. Northwest Territories, and

  6. federally regulated pension plans, regardless of province or territory.

The Table below contains Links to Regulators, Legislation and Maturity Options for LRSPs and LIRAs

All registered pension plans are regulated either federally or provincially. The earliest age that plan member can transfer your LRSP or LIRA to a LIF, LRIF or an annuity varies from province to province. Federal plans have their own regulations and legislation. If you are a plan member of a federally regulated plan then the applicable legislation and regulations are federal, regardless in which province or territory the plan member resides in. The governing jurisdiction dictates the minimum age when the plan member can transfer their locked-in funds.





Transfer to LIF/LRIF

Transfer to Life Annuity


Office of Superintendent of Financial Institutions (OSFI) - Pension Plans Section
Private pension plans under federal jurisdiction

Pension Benefits Standards Act, 1985 (PBSA)

At any age

At any age


Financial Institutions Commission- Pensions Department

Public sector pension plans - British Columbia Pension Corporation

Pension Benefits Standards Act [RSBC 1996] (PBSA)

Pension Benefits Standards Act [SBC 2012]

Bill 38 - 2012 Pension Benefits Standards Act

Earliest retirement age under Registered Pension Plan (RPP)

Age 55 or earlier if provided in Registered Pension Plan (RPP)


Alberta Finance - Pensions

Alberta Pensions Administration (APA) Corporation

Employment Pension Plans Act (EPPA), Regulations and Updates

Minimum age 50

Minimum age 50


Saskatchewan Financial Services Commission - Pension Plan Members

Pension Benefits Act and Regulations

Minimum age 55 (pension legislation amended to allow the transfer of locked-in assets to a ‘prescribed’ RRIF either at age 55 or at an earlier age as long as the underlying pension plan allows such a transfer)

Minimum age 55


Manitoba Pension Commission

Pension Benefits Act and Regulation

At any age

At any age


Financial Services Commission of Ontario (FSCO) - Pensions

Pension Benefits Act and Regulations

Age 55 or earlier if provided in Registered Pension Plan (RPP)

Normal Retirement Age as defined by Registered Pension Plan (RPP)


Quebec Retirement Portal
Supplemental Pension Plans

Supplemental Pension Plans Act

At any age

Normal Retirement Age as defined by Registered Pension Plan (RPP)

New Brunswick

New Brunswick Office of the Superintendent of Pensions

Pension Benefits Act (pdf)
Regulation 91-195 Under the Pension Benefits Act

At any age

At any age

Nova Scotia

Nova Scotia Pension Regulation Division

Public sector pension plans - Nova Scotia Pension Agency

Pension Benefits Act and Regulations

No earlier than 10 years prior Normal Retirement Age of Registered Pension Plan (RPP)

Minimum age 55


Government Services - Pensions

Pensions Administration Division (Public Service Pensions)

Pension Benefits Act and Regulations

Normal Retirement Age as defined by Registered Pension Plan (RPP)

Normal Retirement Age as defined by Registered Pension Plan (RPP)

Prince Edward Island

Public Service Commission

Civil Service Superannuation Act,

Teachers' Superannuation Act,

Provincial legislation not in force

Provincial legislation not in force

Northwest Territories

Private pension plans fall under federal jurisdiction - see Federal above





Public service pensions - Yukon Public Service Commission - Pension Plans
Private pension plans fall under federal jurisdiction - see Federal above





Private pension plans fall under federal jurisdiction - see Federal above





The information provided on this web site is intended for general information only. It should not be construed as legal, accounting, tax or specific insurance and investment advice. Clients should consult a professional advisor concerning their situations and any specific insurance and investment matters. While reasonable steps have been taken to ensure that this information was accurate as of the date hereof, Stone-Hedge Financial Group Inc. and its affiliates make no representation or warranty as to the accuracy of this information and assume no responsibility for reliance upon it.


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