Locked-in pension funds - loans and debts, accumulated interest

  1. Can funds in a locked-in registered retirement savings plan (RRSP) be used as collateral for a loan?

    No. The Pension Benefits Standards Act, 1985 and the Pension Benefits Standards Regulations, 1985 (PBSR) prohibit assigning, making a charge against, anticipating or using locked-in RRSPs as a security. Any transaction attempting to do so is void. However, funds unlocked in accordance with the PBSR can then be used at the individual’s discretion.

  2. Can a creditor force someone to use federal locked-in pension funds to pay off debts?

    No. However, if you choose to transfer your funds to a Life Income Fund (LIF), or to a restricted LIF, or to purchase an immediate life annuity, the monthly or annual payments could be seized by a creditor.

  3. Can the investment income that has accrued in a defined contribution pension plan be withdrawn?

    No. No amounts in a defined contribution account can be withdrawn while the account holder is a member of the pension plan.