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Locked-In Plans
The options available
to you are determined by the pension legislation governing your
locked-in funds. Visit the nearest BMO Bank of Montreal branch to discuss your
options in more detail.
Locked-In RSP (LRSP) or Locked-In Retirement Account (LIRA) options
While you cannot withdraw cash or
purchase a regular RIF from a LRSP or LIRA, you can:
- Transfer funds to a locked-in retirement plan,
including
- Transfer funds to an annuity
Life Income Fund
(LIF)
A Life Income Fund or
LIF is similar to a RIF except that there is a legislated maximum amount that
can be withdrawn each year.
- You have flexibility and control over investment
decisions
- To defer taxes longer, the younger spouse's age may be
used to calculate the minimum withdrawal amount (not applicable to certain
provinces)
- In Newfoundland & Labrador, the balance of a LIF
must be converted into a life annuity by age 80; in all other jurisdictions
that offer LIFs, there is no limit to the age at which a LIF can be remain
open.
LIFs are available for pension funds governed by all jurisidictions except Saskatchewan.
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Locked-In Retirement Income Fund (LRIF)
In jurisdictions that offer both Locked-In Retirement Income Funds (LRIFs) and LIFs, the LRIF tends to have more flexible payment options than the LIF.
- The legislated maximum payment with an LRIF takes into
account the plan's investment earnings in the previous year
- An LRIF does not have to be converted to a life annuity, making it ideal for people who prefer to withdraw the annual legislated minimum amount or close to it
Many jurisdictions have extended the payment options of LRIFs to LIFs, and in some cases have phased them out entirely. LRIFs are now available only for pension funds governed by the legislation of Manitoba, Ontario and Newfoundland & Labrador.
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Prescribed RIF (PRIF)
A Prescribed RIF is similar to an RIF, but is available only for pension funds governed by the legislation of Saskatchewan and Manitoba.
- The payment and withdrawal provisions are similar to a
regular RIF: there is an annual minimum payment required, but no maximum
- There is no requirement to close the plan at a
specified age
- The annuitant's spouse may have to sign various consent forms prior to the plan being opened
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