When you leave a job, or cancel membership in a pension plan, you will need to decide what to do with your pensions funds. You have a number of options available to you for the treatment of your pension benefits and your commuted value.
If you elect the direct transfer of the commuted value of your pension benefits into locked-in accounts, the Pension Benefits Act gives you greater control over your retirement monies. Since the money in locked-in accounts comes from pension plans, the legislation contains restrictions that are intended to preserve the money in these locked-in accounts for retirement and provide a lifetime stream of retirement income for former members and their spouse, if any. These restrictions are generally referred to as the locking-in rules.
Learn more about:
- L200-201 - Locked-In Retirement Accounts (LIRAs) [PDF]
- L200-303 - Schedule 1.1 Life Income Funds (New LIFS) [PDF]
- L200-305 - Schedule 1 Life Income Funds (Old LIFS) [PDF]
- L200-501 - Locked-In Retirement Income Funds (LRIFs) [PDF]
- Locked-in Accounts - Maximum Annual Income Payment Amount Table
- Questions and Answers on Rules For Ontario Locked-In Accounts - O. Reg. 416/07
- Changes to the Rules for Ontario Locked-In Accounts - O. Reg. 239/09
- September 5, 2007:Letter to Financial Institutions offering Locked-In Accounts and their Associations
- Pension Unlocking: Non-Hardship
How to unlock a “locked-in account”
Under certain circumstances, funds in a locked-in account may be accessible. Withdrawals, if permitted, are restricted by the Year's Maximum Pensionable Earnings (YMPE) amount.
The Year’s Maximum Pensionable Earnings (YMPE) is a dollar amount set each year in relation to the Canada Pension Plan. The YMPE determines the amount a person is eligible to withdraw or transfer from a locked-in account. A new YMPE is set every year. The YMPE for 2021 is $61,600.