Changes to Federal Locked-in Accounts
If you have funds in a locked-in retirement account, take note! If the funds came from a pension plan governed by the federal Pension Benefits Standards Act (PBSA), you will have an opportunity to unlock at least some of these funds. The PBSA covers pensions from federally-regulated employers such as banks, transportation companies, broadcasting and telecommunications firms, federal Crown corporations, and the federal government.
As of May 8, 2008, anyone holding locked-in funds that originated from one of these pension plans has greater access to their funds as follows:
- Life Income Fund (LIF) holders age 55 and older with total holdings of $22,450 or less may withdraw their funds in cash or convert them to an RRSP or a RRIF
- Locked-in plan holders age 55 and older are entitled to a one-time conversion of up to 50% of their holdings into an RRSP or a RRIF
- Locked-in plan holders of any age may unlock up to $22,450 per year in the event of financial hardship
The dollar limits above will be increased annually.
Under similar changes in Ontario legislation, those who hold locked-in funds registered in Ontario may now unlock up to 25% of their funds under certain circumstances.
If you have a locked-in account with PWL that originated from a pension plan registered federally or falls under Ontario regulations, your advisor will be in touch with you to discuss your options.