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