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Locked In Retirement Account

Main Features

  • A locked-in retirement account (LIRA) is a plan designed to transfer sums out of a registered pension plan.
  • The sums held in an LIRA are locked in because they must be used to provide pension income.
  • An LIRA must be converted into a life income fund (LIF) or life annuity by December 31 of the year the planholder turns 71. However, there is no minimum-age restriction for LIF conversions.
  • At many insurance companies, investments transferred from an LIRA to an LIF maintain the same terms and conditions (i.e., amounts, maturity dates, etc.).
  • All these investments are LIRA eligible: guaranteed investment certificates, stock-indexed deposits, segregated funds, mutual funds, shares, bonds, and deferred annuities.

Major Advantages

  • LIRAs allow the proceeds of former employers’ pension funds to be transferred, enabling the investors to manage the capitalized value of their registered pension plans (RPP) themselves and keep their capital and accumulated interest sheltered from tax.
  • Generally speaking, sums invested in an LIRA are exempt from seizure because they come from an RPP. However, they are 50% seizable for married couples who divorce and split family assets.
To get more information on Registered Plans please click here Warning: The above text is of general nature and is intended for explanatory purpose only. Each of the products described above has its own specific features. Moreover, only the product contracts contain the complete terms and conditions as well as restrictions and exclusions to which they are subject.