What is the difference between a Locked-In Retirement Account (LIRA) and a Locked-In Retirement Savings Plan (LRSP)?

The difference is the pension legislation governing your employer’s pension plan. If the federal pension legislation governs your pension plan, then you can transfer your pension entitlement into a LRSP. If provincial pension legislation governs your pension plan, then your pension entitlement can be transferred into a LIRA.

The distinction between a LIRA and a LRSP are important because the guidelines for the administration of your account will be set by the applicable pension legislation – federal or provincial.

The following chart outlines the rules that govern LIRAs and LRSPs:

 Description:

Locked-In Retirement Account (LIRA):

Locked-In Retirement Savings Plan (LRSP):

 

Provincial Legislation

Federal Legislation

Source of Funds:

-A provincially registered pension plan (RPP)

-A federally registered     pension plan (RPP)

 

-Another LIRA administered under the same provincial legislation.

-Another LRSP regulated  under federal legislation.

 

-A provincially regulated Life Income Fund (LIF).

-A federally regulated Life Income Fund (LIF).

 

 

 

Contributions:

Not Permitted

Not Permitted

Age Limit:

71 and younger

71 and younger

Maturity Options:

-Convert to a provincially regulated Life Income Fund (LIF)

-Convert to a federally regulated Life Income Fund (LIF)

 

-Purchase a life Annuity

-Purchase a life Annuity

 

 

-Convert to a Restricted Life Income Fund (RLIF)

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