Office of the Superintendent of Financial Institutions
Federally regulated locked-in retirement saving plans include a life income fund, a restricted life income fund, a restricted locked-in savings plan and a locked-in registered retirement savings plan, and can hold funds originating from a federally regulated pension plan. The different types of locked-in retirement savings plans are defined in OSFI's glossary that can be found on our website.
The unlocking options available from a locked-in retirement savings plan or a pension plan, and the conditions that must be met to take advantage of them, are set out in sections 20, 20.1, 20.2, 20.3 and 28.4 of the Pension Benefits Standards Regulations, 1985 (PBSR).
Please note that not all unlocking options are available from a pension plan or from every locked-in retirement savings plan. The chart below provides a general description of the unlocking options, from where they are available, and a link to the forms that must be completed. A number of the unlocking provisions refer to the "Year's Maximum Pensionable Earnings" (YMPE) in determining whether funds can be unlocked and/or the amounts that can be unlocked. The YMPE is a dollar amount that is the maximum pensionable earnings under the Canada Pension Plan and changes annually based on a legislated formula. The YMPE for 2020 is $58,700.
If a person is:
a certain amount may be withdrawn from a locked-in account.
The funds may be withdrawn as cash, or transferred to a tax-deferred savings vehicle such as a registered retirement savings plan (RRSP) or a registered retirement income fund (RRIF), subject to any applicable income tax rules.
The maximum amount that can be unlocked depends on the person's expected income for the year – the withdrawal amount varies from 50% of the YMPE (or $29,350 in 2020) for $0 expected income to $0 when expected income is 75% or higher of the YMPE (or $44,025 for 2020)
High Medical or Disability-Related Expenditures
Depending on expected medical or disability-related expenditures, can unlock up to a maximum of 50% of the YMPE (or $29,350 in 2020) can be unlocked.
The 2020 YMPE is $58,700.
Form 1 and Instructions: Attestation Regarding Withdrawal Based on Financial Hardship
Form 2: Attestation Regarding Spouse/Common-Law Partner
If the following criteria are met, then a person's pension may be withdrawn in cash or transferred to a tax-deferred savings vehicle such as an RRSP or a RRIF subject to any applicable income tax rules:
The total value of the pension benefit or locked-in account balance
No prescribed form required
Shortened life expectancy:
If a person has a shortened life expectancy (as certified by a physician) due to a physical or mental condition, the funds may be withdrawn in cash or transferred to a tax-deferred savings vehicle such as an RRSP or an RRIF subject to any applicable income tax rules.
* If the funds are in a pension plan, the pension plan may provide a payment or a series of payments in lieu of a pension benefit, but is not required to do so. This option is not available if a person has already commenced their pension.
The total value of the person's pension benefit or locked-in account balance
No prescribed form required
Small pension benefit unlocking from a pension plan:
If a person has ceased membership in a pension plan and the value of their pension benefit is less than 20% of the YMPE for the calendar year in which their membership ceased, then the plan administrator can choose to pay out this amount in a lump sum.
The funds may be paid in cash or transferred to a tax-deferred savings vehicle such as an RRSP or an RRIF subject to any applicable income tax rules.
The total value of the person's pension benefit
No prescribed form
Terminating member would receive a termination statement from the plan administrator
Age 55 and over - One-time 50% unlocking:
If a person:
they may transfer 50% of the funds in their RLIF into an RRSP or an RRIF. Cash can then be withdrawn, from either of these vehicles, subject to any applicable income tax rules. The funds cannot be taken directly in cash from an RLIF.
Up to 50% of the total value of the locked-in account balance
Age 55 and over - Small account balance unlocking
the funds may be withdrawn as cash, or transferred to a tax-deferred savings vehicle, such as an RRSP or an RRIF subject to any applicable income tax rules.
Total value of the locked-in account balances.
Form 3: Attestation of Total Amount Held in Federally Regulated Locked-in Plans
The necessary forms can be obtained from the financial institution that holds the locked-in retirement savings plan contract. Generic versions of the forms are available on OSFI's website in Word or PDF format and the specific links are provided in the chart in question 2 above. Any other forms required by a financial institution would be supplied by them.
The Pension Benefits Standards Regulations, 1985 do not require that financial institutions or advisors verify the figures provided by a client.
The role of the notary public, commissioner, or other person authorized to take affidavits is to verify and witness the individual's signature, not to verify the contents of what the individual is certifying to be true.
The federal government's public service pension plan is governed by the Public Service Superannuation Act (PSSA), not the Pension Benefits Standards Act, 1985 (PBSA). The Treasury Board of Canada Secretariat is responsible for matters relating to pensions for federal government employees. Questions regarding benefits payable under this plan should be directed to the Treasury Board of Canada Secretariat. Their toll-free number is 1-800-561-7930.
The PSSA provides that funds can be transferred from the public service pension plan to a locked-in RRSP, a life income fund, or a restricted life income fund so the Pension Benefits Standards Regulations, 1985 (PBSR) provisions regarding these types of vehicles will apply to any funds transferred from the public service pension plan to these vehicles.
Yes, as long as all the conditions for unlocking under the relevant option(s) are met. For example, if after using the one-time 50% unlocking option, the amount left in the Restricted Life Income Fund meets the small balance requirements, then that option can be used, either in the same year or in any subsequent year.
Yes. The maximum annual amount that may be withdrawn from a LIF or an RLIF is separate from, and in addition to, any unlocking that is done under the one-time 50%, small account balance or financial hardship options. However, funds withdrawn from a LIF or an RLIF must be included in your expected income in a calendar year under the financial hardship unlocking formula.
If a person who has a spouse or common-law partner, wishes to unlock funds under financial hardship, one-time 50% or small account balance unlocking, then the spouse or common-law partner must sign Form 2: Attestation Regarding Spouse/Common-Law Partner that attests that they consent to the unlocking (see also questions 2 and 11 regarding this form).
If a person does not have a spouse or common-law partner, then they must attest to this on the same form.
If a person wishes to unlock funds under shortened life or non-residency unlocking, spousal consent is not required under the Pension Benefits Standards Act, 1985 or the Pension Benefits Standards Regulations, 1985; however, a financial institution may request a form of spousal consent as part of its administrative procedures.
An attestation means that the person making the attestation is certifying that to the best of their knowledge, the information in the form they are signing is true and accurate. All attestations must be made before a notary public, commissioner, or other person authorized to take sworn affidavits.
No. An attestation may be made outside of Canada as long as it is made before a qualified person (i.e. a notary public, commissioner or other person authorized to take sworn affidavits) in the person's country of residence.
No. A spouse or common-law partner does not have to make their attestation at the same time that the fund holder makes their attestation and the attestations do not have to be made before the same qualified person (i.e. a notary public, commissioner or other person authorized to take sworn affidavits).
If someone has a spouse or common law partner, their consent is required before the funds can be unlocked under financial hardship, one-time 50% or small account balance unlocking. The spouse or common law partner's consent is provided by completing Form 2 of Schedule V of the Pension Benefits Standards Regulations, 1985 (Form 2).
If someone is no longer living with their former common-law partner, then no consent is required from them because that person is no longer considered a common-law partner under the Pension Benefits Standards Act, 1985.
If someone does not have a common-law partner, but has a spouse from whom they have separated but not divorced, that person is still considered to be the spouse and their consent is required unless a court order or agreement that provides for the distribution of property clearly and unambiguously provides that the spouse no longer has a right to a share of the funds that the person is seeking to unlock. Such a court order or agreement should be noted and attached to Form 2. In a case where no such court order or agreement exists and the spouse cannot be located, legal advice should be sought to determine the options available.
If the fund holder has not reached age 71, he or she may transfer the funds in the LIF back into a locked-in RRSP. Age 71 is the maximum age set by the Income Tax Act. For information about RRSP options at age 71, please refer to the Canada Revenue Agency's website.
No, the required forms do not need to be signed by a Canadian physician. The person may wish to review whether funds can be unlocked because the person has met the non-residency conditions described in the table in question 2.