Locked in Funds (LIRA)

A LIRA (or Locked-in RRSP) functions in the same way as a regular RRSP except that it is locked-in until the retirement of the holder when it must be used to provide retirement income. No cash withdrawals can be made from a LIRA.

Investment Options

• Variable (floating interest rate)
• 6 months to 5 years Fixed—Minimum deposit of $500

Features

• Three sources of funds for a LIRA are Registered Pension Plans, another Locked-in RRSP, or a LIF.
• Cannot be combined with “Non Locked-in” funds.
• Can only be transferred out to institutions approved to handle funds of the jurisdiction of the pension plan from which the funds came.
• Until the member retires, the LIRA functions like an RRSP continuing to compound interest and providing flexibility in investment decisions.
• The LIRA must be converted to a LIF, or annuity (depending on the pension jurisdiction) no later than December 31st of the year the member turns 71.
• Funds are fully guaranteed by the Credit Union Deposit Guarantee Corporation.

Interest

• Interest is paid in accordance with length of term and applicable rate.
• Variable RRSP interest is accrued daily and paid monthly.
• Interest is compounded annually on the anniversary date for fixed rate RRSPs.
• Interest must be compounded, as it cannot leave the plan in which it is sheltered.

Pricing

• No administration fees. However a transfer-out fee may apply.