- Call one of our Pension specialists to complete an application for approval
- Approved funds will be directed to our lawyers trust account for distribution
- Funds will then be forwarded as required.
In Ontario, locked-in retirement savings accounts are subject to the federal Income Tax Act and Ontario's Pension Benefits Act (PBA) and regulations. Normally, you must wait until you turn 55 before you can start receiving payments from your locked-in account, and there are limits set on the minimum and maximum payments you can receive in any one year.
What is a locked-in retirement savings account? If you were entitled to a deferred pension at the time you terminated your membership in a registered pension plan, one of your options was to transfer the value of your pension benefit into a locked-in retirement savings account. This type of account is exclusively for money earned in a registered pension plan, and generally speaking, any money transferred into it must remain "locked in". This means that the money payable to you from this account can be used only to provide retirement income, which normally means that you must wait until you reach age 55. Also, while your money is locked in, it cannot be seized by creditors.
In Ontario, there are three types of locked-in accounts:
- Locked-in Retirement Account (LIRA),
- Life Income Fund (LIF), and
- Locked-in Retirement Income Fund (LRIF).
Important points to consider before you apply: Before you apply for special access to your LIRA, LIF, or LRIF, please make sure that it is subject to Ontario law, and not to federal legislation or the law of another province or territory (another jurisdiction). For example:
- If you worked for a federally regulated industry such as banking, telecommunications, or airline transportation, your locked-in account is likely subject to federal law.
- If your pension was earned as a result of employment in another province, the money in your locked-in account is governed by the pension law of that province. It does not matter if the pension plan was registered in Ontario - what matters is where the pension was earned.
- Under what circumstances can you apply for special access? You may be able to gain special access to your Ontario locked-in account(s) if:
- You have an illness or physical disability that is likely to shorten your life expectancy to less than two years.
- You are at least 55 years old and the total value of the funds in your Ontario locked-in account(s) is less than a specified amount ($18, 880 in 2010).
- Your locked-in assets exceed federal Income Tax Act limits..
- You are facing specific types of financial hardship.
- Shortened life expectancy.
You can apply to withdraw some or all of the money in your LIRA, LIF, or LRIF if you have an illness or physical disability that is likely to shorten your life expectancy to less than two years. Your application must include a signed statement attesting to your condition from a medical doctor who is licensed to practise in Canada.
Some pension plans allow members to withdraw money in these circumstances on more generous terms than under the legislation. You might want to check if the terms of your former pension plan include this type of provision. If so, contact the financial institution which administers your LIRA, LIF, or LRIF to take advantage of those provisions.
Age 55 and a minimal amount of money in your LIRA, LIF, or LRIF
If you are age 55 or older and the total value of the funds in all of your Ontario-regulated locked-in account(s) is less than a specified amount. You can choose to withdraw all of the money and close the account(s).
Under Ontario's pension law, you may qualify for special access to your LIRA, LIF, or LRIF if you are facing financial hardship under the specific categories listed below. If you want to apply for special access to more than one locked-in account, a separate application is required for each account. Please note, however, that you cannot apply to withdraw money from any of your locked-in accounts under a category of financial hardship for which you have already successfully applied within the last 12 months. If you find yourself in any of the following situations, you may be eligible to gain access to your locked-in account:
- Low income - Your expected total personal income from all sources, before taxes, for the next 12 months must be less than a specified amount. This amount changes every year.
- Risk of eviction from your home - You or your spouse are at risk of eviction due to unpaid payments on a debt (such as a mortgage) secured against your home. You have received a written demand for payment from the creditor and you need the money to avoid eviction.
- Risk of eviction from your rented residence - You or your spouse are at risk of eviction due to unpaid rent for your residence. You have received a written demand for payment from your landlord and you need the money to avoid eviction.
- Rent deposit - You need the money to pay the first and last months' rent in order to rent a place to live.
- Medical expenses - You need the money to pay for certain medical or dental expenses (e.g., prescription drugs, medical devices) to deal with an illness or physical disability for you, your spouse, or a dependant of either of you. These expenses cannot be covered by a provincial health plan, your private health insurance, or any other source. You may claim for expenses already paid or those you will incur in the future, as long as they meet these criteria. You must provide a doctor's (or a dentist's) letter stating that the treatment is necessary.
- Residential renovations, alterations, or construction to accommodate an illness or physical disability - The illness or disability must affect you, your spouse, or a dependant of either of you. The renovations or alterations can be made to your home or the dependant's home. The money can also be applied to the cost of including features in the construction of a new home that accommodate an illness or disability. You must provide a doctor's letter stating that the renovations, alterations, or construction are necessary to accommodate the illness or disability.
It's Quick and Easy as 1 - 2 - 3
Call us today and speak to one of our Pension specialists. Should you have any questions or require any guidance, a dedicated representative will be available to guide you every step of the way.