Locked-in retirement account (LIRA)

A former member of an Ontario plan, including one whose employment ends around a sale, can have a right to move a deferred pension’s commuted value out of the plan. A locked-in retirement account, or LIRA, is one place it can go. This entry covers Ontario only; check the rules where you are.

How it works in Ontario

Regulation 909 defines a locked-in retirement account as an RRSP that meets Schedule 3 requirements. Under the Pension Benefits Act, s.42(1), a former member may require the administrator to pay the commuted value of a deferred pension into a prescribed retirement savings arrangement, subject to the limitations and exceptions in s.42(2), (3) and (6). Reg. 909, s.21, lists a locked-in retirement account among them. On a wind-up, s.73(2) gives a person entitled to a pension benefit, other than one already receiving a pension, the s.42(1) rights of a member who terminates employment; s.73(2) sets a separate rule for a person receiving a target benefit pension.

What to ask

• Whether the plan is ending and who the administrator is
• What deadline applies, since Reg. 909, s.20, sets a period for delivering a direction
• What happens to any amount above the Income Tax Act amount referred to in Reg. 909, s.21

See vesting and the pension or benefits plan answer.