Understanding locked-in plans

Locked-in plans are when employers and employees’ vested contributions and interest are transferred into a Registered Retirement Savings Plan until the investor reaches a specific age (anywhere from age 50 to 70) depending on the pension legislation applicable to your plan.

Types of plans – Retirement savings and retirement income

Locked-in Retirement Account (LIRA), Locked-in Retirement Savings Plan (LRSP), and Restricted Locked-in Savings Plan (RLSP) are locked-in versions of a Registered Retirement Savings Plan (RRSP) to which no contributions can be made.

Life Income Fund (LIF), Locked-in Retirement Income Fund (LRIF), Prescribed Retirement Income Fund (PRIF) and Restricted Life Income Fund (RLIF) are locked-in versions of RRIFs. No contributions can be made and withdrawals are subject to annual minimums and maximums.

Federal Pooled Registered Pension Plan (PRPP)

A Pool Registered Pension Plans (PRPP) is a new kind of deferred income plan designed to provide retirement income for employees and self-employed individuals who do not have access to a workplace pension.  Recent regulatory changes allow Mackenzie Investments to accept and administer funds derived from Federal PRPPs, in addition to funds derived from Federal Registered Pension Plans (RPPs).  

A locked-in account that has accepted funds derived from a Federal RPP must be kept separate from a locked-in account that has accepted funds derived from a Federal PRPP.  The RPP funds must be kept separate from the PRPP funds to ensure that the correct prescribed government forms are used in certain unlocking transactions.

There is a separate addendum for PRPP assets and RPP assets under each Federally legislated account type.

Benefits of locked-in plans

  • Moving vested amounts into a locked-in account provides diversification.
  • Full and direct access to a range of investment options that are typically more limited in a pension plan.
  • Helps avoid uncertainty with respect to retirement income from future instability or uncertainty of an employer.
  • While locked-in plans can be strict with regards to withdrawals, certain jurisdictions may permit access to funds that are locked‑in.
  • Certain jurisdictions may permit a client to unlock a lump sum amount as a one-time event.

Who should invest?

Investors who:

  • Have left a former employer and have vested contributions.
  • Would like more diversification as part of their retirement savings.
  • Are concerned about the stability of their retirement savings with current employer.
  • Want more control over their investments.

Maximize your savings

  • Work with an advisor to get advice on which locked-in plan is right for you.
  • Choose from a large selection of investment options to diversify by asset class.
  • Consider managed portfolio solutions such as Symmetry Portfolios – higher returns with less expected risk.

Next steps

Contact your financial advisor for more information on locked-in plans.