The Locked-In Retirement Account (LIRA) and Locked-In Retirement Savings Plan (LRSP) enable you, as an employee to maintain the tax-deferred status of pension plan proceeds received when you leave a company. LIRA's lock in your money, but not your investment options. These plans are governed by federal or provincial pension legislation.
- The LIRA can receive pension proceeds if the planholder earned the pension while working in a province other than B.C., Nova Scotia, or P.E.I.
P.E.I. has not yet established its own pension legislation, therefore any locked-in plans from P.E.I. must be handled individually
All money in locked-in plans must come from your Registered Pension Plan (RPP) or from another locked-in plan. You can’t make additional contributions, but you can decide how your money is invested.
The LIRA or LRSP must be collapsed in the year in which you have your 71st birthday. You can then:
- Purchase an annuity, or
- Transfer the assets to a LIF or LRIF, depending on the pension legislation governing the LIRA or LRSP
Contact our office for more information about Locked-in Retirement Accounts.
Copyright © 2015 AdvisorNet Communications Inc. All rights reserved. This article is provided for informational purposes only and is based on the perspectives and opinions of the owners and writers only. The information provided is not intended to provide specific financial advice. It is strongly recommended that the reader seek qualified professional advice before making any financial decisions based on anything discussed in this article. This article is not to be copied or republished in any format for any reason without the written permission of the AdvisorNet Communications. The publisher does not guarantee the accuracy of the information and is not liable in any way for any error or omission.