Unlocking for Non-Residents

Publication type
Locked-in retirement funds
Defined benefit plans
Defined contribution plans

Section 28.4 of the Pension Benefits Standards Regulations, 1985 (Regulations), was introduced to exempt plan members and former members who cease to be Canadian residents from the application of the locking-in requirements of section 18 of the Pension Benefits Standards Act, 1985 (PBSA).

Subsection 28.4(2) of the Regulations provides that a plan member or former member shall be deemed to have been a resident of Canada throughout a calendar year if that member or former member has sojourned in Canada in the year for a period of, or periods the total of which is, 183 days or more.

There is no requirement that the pension plan text specifically provide for the provision set out in subsection 28.4(1) of the Regulations; this provision can be added to an existing locked-in retirement savings plan or Life Income Fund (LIF) so that where the requirements of section 28.4 of the Regulations (non-residency conditions) are met, the pension benefit credit held in that locked-in registered retirement savings plan or LIF can be unlocked.

Published in PBSA Update, Issue No. 26 September 2006, PBSA Update, Issue No. 12 September 1995