LIFs, LRIFs & PRRIFs

Question 1

What are the options for funds being transferred from a registered pension plan (RPP)?

Answer 1

• RPP
• LIRA or LRRSP
• LRIF
• LIF
• PRRIF (for SK & MB only)
• Qualified life annuity

Question 2

What are the special circumstances in which a locked in fund can be unlocked?

Answer 2

1. Where an annuitant is certified to have a shortened life expectancy due to a medical disability.
2. Where the total value of the funds is so low (based on specific criteria in the jurisdiction)
3. Where the annuitant no longer becomes a Canadian resident
4. Financial hardship

Question 3

What are PRRIFs?

Answer 3

Prescribed retirement income funds (usually applicable for SK and MB).

Funds that did not originate from a pension plan that follows the SK’s pension benefits act (PBA) are ineligible for a PRRIF.

Question 4

What are the examples of plans from which funds cannot transfer to a PRRIF?

Answer 4

1. Employee profit sharing plans
2. Deferred profit sharing plans
3. Retiring allowances
4. RRSPs
5. Pension plans regulated by the federal govt

Question 5

Where can a prescribed RRIF receive funds from?

Answer 5

1. LIRA
2. LIF
3. LRIF

Question 6

Which plans can transfer funds into a LIF?

Answer 6

1. Another LIF
2. RPP
3. LIRA or locked in RRSP
4. A life annuity

Question 7

Is there a spousal LIF?

Answer 7

No

Question 8

Is there a minimum LIF amount?

Answer 8

Yes. It can also be based on the minimum of a RRIF, which may be based on the annuitant’s age or the spouse’s age.

Question 9

Is there a maximum amount that can be withdrawn from a LIF?

Answer 9

Yes. The calculation is:

Maximum = V - P

Where V is the value of the LIF on January 1st
P 1 value of the projected annual pension of $1 beginning on January 1 of the year and continuing for the period ending Dec 31st of the year the annuitant turns 90.

Question 10

Which plans can a LIF transfer funds to before an annuitant turns age 80?

Answer 10

1. LIF
2. LRIF (MB & NFL)
3. LIRA or locked in RRSP
4. Life annuity

Question 11

If a person wants to transfer assets from a LIF to a registered pension plan (RPP), can they do so?

Answer 11

No. They would have to transfer it to a LIRA and then to an RPP.

Transferring institution has to pay the minimum payment for that year if it hasn’t already been paid before moving funds.

Question 12

Some jurisdictions require that the amount remaining in the LIF be transferred to what plan before the annuitant turns age 80?

Answer 12

A life annuity

Question 13

In terms of a surviving spouse not being named as a beneficiary on a LIF, what happens?

Answer 13

Provincial pension benefits legislation may override the will and the beneficiary designation if the spouse is not named a beneficiary.

If there no surviving spouse, then the assets will be unlocked and paid to the beneficiary.

Question 14

Is it possible to name a successor owner on a LIF?

Answer 14

No

Question 15

What is a LIF and a LRIF?

Answer 15

They’re both restricted forms of a RRIF designed to hold and distribute locked in funds. Pension benefits restrict withdrawals and provide spousal protection.

LRIF applies to Manitoba and Newfoundland and Labrador.

Question 16

What is the difference between an LRIF and a LIF?

Answer 16

An LRIF differs from a LIF in its calculation of the maximum annual withdrawal limit from both plans.

It also differs from a LIF in that it doesn’t require the balance of its assets to be used to purchase a life annuity at a prescribed point in time unlike a LIF which requires that in some jurisdictions.

Question 17

Which plans can an LRIF receive funds from?

Answer 17

1. LRIF
2. RPP
3. LIRA or locked in RRSP
4. Annuity

Question 18

An annuitant may transfer LRIF assets to:

Answer 18

1. LRIF
2. LIRA
3. Eligible annuity

Question 19

For which plans are spouse’s rights terminated upon divorce or separation?

Answer 19

1. LIF

2. LRIF