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LIRAs and LIFs
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Overview
Locked‑in accounts help to protect pension funds when they are transferred out of a registered pension plan to an authorized financial institution of your choice. Because these funds come from pension plans, the legislation includes rules that ensure the money is preserved for retirement and can provide former members and their spouse, if applicable, with steady income throughout their lifetime. These protections are commonly known as the locking‑in rules.
In British Columbia, Locked‑In Retirement Accounts (LIRAs) and Life Income Funds (LIFs) are governed by the Pension Benefits Standards Act (PBSA) and the Pension Benefits Standards Regulation (PBSR), which establish the rules for how locked‑in funds must be managed to help protect these savings and ensure they are used to support income in retirement.
If you left your pension before 1993, lock‑in rules may not apply; check with your plan administrator.
Key Features of LIRAs and LIFS
| Feature | LIRA | LIF |
|---|---|---|
| Purpose | Holds and preserves pension funds after leaving a pension plan | Provides ongoing retirement income |
| Stage of Use | Savings stage (before retirement income begins) | Income stage (during retirement) |
| Eligibility | Can be transferred from a pension plan or another LIRA when a person leaves the plan, the plan ends, or due to life events such as separation, divorce, or death. | Age 50+ and holding a LIRA (or direct transfer from a pension plan) |
| Withdrawals | Generally, not permitted except for legislated unlocking | Required annually and must follow min/max rules. Also permitted for legislated unlocking |
| Minimum Withdrawal | Not applicable | Set by Income Tax Regulations |
| Maximum Withdrawal | Not applicable | Set by PBSR based on age and interest rates |
Need More Help?
If you have questions about your LIF, LIRA, or pension transfer options:
- Contact your financial institution for withdrawal calculations or investment guidance.
- Contact your pension plan administrator for information about your specific plan rules.
- Refer to the PBSA and PBSR for detailed legislative requirements.