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Key Points for individuals wishing to unlock federally locked-in funds:
- If you hold federally locked-in funds, your first point of contact should be with the financial intermediary that holds your account.
- Your financial intermediary may be able to assist in determining whether you are eligible for unlocking, and may be able to assist in filling out the forms.
- Do not send your forms to the Government or OSFI. The Government’s role is not to approve individuals’ forms or to provide individual assistance in filling out the forms.
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Forms
Form 1 - Attestation Regarding Withdrawal Based on Financial Hardship (Word format or PDF format)
Explanatory Document for Form 1 (PDF format)
Form 2 - Attestation Regarding Spouse/Common-Law Partner (Word format or PDF format)
Form 3 - Attestation of Total Amount Held in Federally Regulated Locked-in Plans (Word format or PDF format)
General Questions
- Who can unlock funds?
- What unlocking options are available?
- How much can I unlock?
- Can I take advantage of the new options without purchasing a new locked-in fund or amending my existing contract?
- Do the new options affect provincially regulated pensions?
- Do the new options affect the pensions of those who were or are employed by the Government of Canada?
- What is the form of withdrawal (i.e. cash or RRSP) for the three new options?
- Can I combine these new unlocking options? Can two options be used in the same calendar year?
- Is the maximum annual withdrawal from a LIF separate and in addition to these new options?
- Has anything been done to protect the interests of the spouses or common-law partners of individuals?
- What if I can’t locate my spouse?
- When does my pension plan money become locked in?
- Can I unlock small amounts when I leave my pension plan?
- Do funds become taxable if they are unlocked?
- Can I use my locked-in registered retirement savings plan (RRSP) as collateral for a loan?
- Does unlocking funds affect the protection these funds receive from creditors?
- Can a creditor force me to use my federal locked-in pension funds to pay off my debts?
- Can I remove the growth/interest from my defined contribution (money purchase) pension plan when returns on my mutual fund investment account are high?
Questions relating to contracts and addendums (following the changes to the LIF Regulations)
- Can my financial institution or advisor update my contracts by simply revising the addendum or is a new contract required?
- Can my financial institution or advisor charge penalties for unlocking early?
- Can I take my pension credits out of my pension, put them in a RLIF, and unlock half the value?
Questions about the forms
- What forms are required for each option?
- Where can I obtain the forms required to unlock the funds in my Life Income Fund?
- Who is responsible for filling out the forms?
- What are the responsibilities of the financial institution or advisor for verifying the accuracy of individuals’ certifications?
Questions about the one-time 50% unlocking option and the restricted LIF
- When is the date of establishment of the RLIF?
- Is the withdrawal limit up to 50%, or exactly 50%?
- What is the date on which the 50% limit is determined?
- Is there a maximum annual withdrawal in year 1 from the RLIF, if transferring from a LIF?
- What if the holder of a LIF was receiving their annual maximum withdrawal on a monthly basis, before transferring to a RLIF?
- What if I want to unlock funds under the one-time 50% option from more then one account?
- If I unlock 50% of my RLIF and transfer this amount into a regular RRSP, does this put me above my yearly maximum contribution for RRSPs?
- For the one time 50% unlocking option, can the funds be transferred to a spousal RRSP?
- Can I transfer funds directly from a locked-in savings plan to a restricted locked-in savings plan (RLSP)?
Questions about Financial Hardship unlocking
- What is financial hardship? Am I eligible for financial hardship unlocking?
- What does Expected Income mean? Is it individual or household income?
- What is YMPE?
- For withdrawals based on medical expenditures, who do the medical expenditures have to be for?
- What kind of medical expenditures does this refer to?
- What is the 30 day rule? When does it start?