Locked-In Retirement Accounts (LIRAs)

Locked-in Retirement Account (Quebec LIRA)

A LIRA is a special registered retirement savings plan. The money in your LIRA is locked because they it be used to provide retirement income. Therefore, these sums can not be removed except in certain circumstances where a refund of the LIRA is permitted. The funds initially come from a supplemental pension plan established by your employer.

You can withdraw funds from a LIRA when:

• a physician certifies that your life expectancy is reduced; you may make a full or partial withdrawal;
• you haven't lived in Canada for at least two years; the balance must be withdrawn all at once;
• You were 65 or older on December 31 of the previous year and the total amount you have accumulated in retirement savings instruments (LIRA, LIF, supplemental pension plan, simplified pension plan and locked-in RRSP) does not exceed 40% of the maximum pensionable earnings (MPE) of the RRQ.

Conversion

At any time, but no later than December 31 of the year you turn 71, you can convert your LIRA into an annuity or LIF (life income fund). Upon your death, the balance of your LIRA is no longer locked. It is paid to your spouse or, if they renounce it or in their absence, to your heirs. If it is paid to your spouse, they may transfer it to their own RRSP or RRIF tax-free.

Locked-in Retirement Account (Ontario LIRA)

A LIRA is a special registered retirement savings plan. The money in your LIRA is locked because they it be used to provide retirement income. Therefore, these sums can not be removed except in certain circumstances where a refund of the LIRA is permitted. The funds initially come from a supplemental pension plan established by your employer.

You can withdraw funds from a LIRA when:

• a physician certifies that you have an illness or physical disability that is likely to shorten your life expectancy to less than two years;
• you are facing financial hardship (e.g. low income, medical expenses, arrears of rent.)
• you have not lived in Canada for at least two years;
• you are aged at least 55 years and the total value of the assets you hold in all your Ontario locked-in accounts is less than 40% of the maximum pensionable earnings ("MPE") for the calendar year in which the request is submitted

Conversion

Generally not before the age of 55, but no later than December 31 in the year you turn 71, you can convert your LIRA into a LIF or annuity.

Upon your death, the balance of your LIRA is no longer locked. It is paid to your spouse or, if they renounce it or in their absence, to your heirs. If it is paid to your spouse, they may transfer it to their own RRSP or RRIF tax-free.