Author Topic: Transfer from LIRA to Locked-in RRSP  (Read 1406 times)

Snizycki

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Transfer from LIRA to Locked-in RRSP
« on: December 20, 2017, 10:50:49 PM »
I am helping my dad transfer his Locked-in Retirement Account (LIRA) from Sun Life (high MER) to low-cost ETFs with Questrade.  Questrade is saying that because of the regulation over my father's existing Sun Life LIRA, he will need to open a Locked-in RRSP with Questrade, and then request that the funds in the Sun Life LIRA would be transferred to the Questrade Locked-in RRSP.

Given that the two accounts have different names, I am nervous about triggering any tax consequences. In other words, I want to ensure that the transfer will not constitute a "withdrawal" from his LIRA. Has anyone experienced this situation? Any advice/thoughts?

RichMoose

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Re: Transfer from LIRA to Locked-in RRSP
« Reply #1 on: December 21, 2017, 09:06:28 AM »
I am helping my dad transfer his Locked-in Retirement Account (LIRA) from Sun Life (high MER) to low-cost ETFs with Questrade.  Questrade is saying that because of the regulation over my father's existing Sun Life LIRA, he will need to open a Locked-in RRSP with Questrade, and then request that the funds in the Sun Life LIRA would be transferred to the Questrade Locked-in RRSP.

Given that the two accounts have different names, I am nervous about triggering any tax consequences. In other words, I want to ensure that the transfer will not constitute a "withdrawal" from his LIRA. Has anyone experienced this situation? Any advice/thoughts?
I had the same issue. Does his LIRA derive from a federal pension or federally regulated workplace (CN/CP etc)?

A LIRA and a locked in RRSP are essentially the same thing. The difference is that LIRAs are provincially administered and L-RRSPs are federal. They generally work the same in that they can't be touched early subject to specific rules, you can't contribute to them personally, and they must be converted to a LIF or annuity on maturity (age 71 at the latest).
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Snizycki

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Re: Transfer from LIRA to Locked-in RRSP
« Reply #2 on: December 21, 2017, 11:28:59 PM »
Hmm, yes he worked for a national telecom company, so "federally regulated workplace" may be applicable.

Thanks for the information. I also understand that it's generally not possible to withdraw from a LIRA (must be converted to LIF first), which would decrease the risk that we would accidentally create a withdrawal by doing this transfer. Agreed?

Did you end up transferring from LIRA to Locked-in RRSP with no consequence?

frugalcanuck

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Re: Transfer from LIRA to Locked-in RRSP
« Reply #3 on: December 22, 2017, 08:00:14 PM »
I was able to transfer from LIRA with my old company to a LIRA in Questrade.  Both the company I worked for, and Questrade are located in the same province.  I also thought you were able to gain access to a LIRA funds at age 55.

Cookie78

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Re: Transfer from LIRA to Locked-in RRSP
« Reply #4 on: December 22, 2017, 08:15:41 PM »
I was able to transfer from LIRA with my old company to a LIRA in Questrade.  Both the company I worked for, and Questrade are located in the same province.  I also thought you were able to gain access to a LIRA funds at age 55.

The age when you can access it depends on your province, but usually 55 iirc. However you can not access directly from an LRA, you do need to convert it to a LIF or LRIF first.

http://www.moneysense.ca/save/investing/rrsp/how-to-get-money-out-of-liras/

Don't know about your question OP, but I'm curious what you find out.

RichMoose

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Re: Transfer from LIRA to Locked-in RRSP
« Reply #5 on: December 22, 2017, 08:42:38 PM »
Hmm, yes he worked for a national telecom company, so "federally regulated workplace" may be applicable.

Thanks for the information. I also understand that it's generally not possible to withdraw from a LIRA (must be converted to LIF first), which would decrease the risk that we would accidentally create a withdrawal by doing this transfer. Agreed?

Did you end up transferring from LIRA to Locked-in RRSP with no consequence?
It should be a straight transfer between the brokerages. I don't see how it could become a withdrawal. When you do the transfer paperwork on the SunLife side, they should be confirming the account at Questrade is a L-RRSP under the same regulation. My understanding is that the broker needs to make sure everything is up to snuff as the account regulations don't allow for withdrawals except under specific circumstances that involve a lot of paperwork.

My transfer was from a federal pension to the L-RRSP. It was a bit of a hassle on the pension side, but Questrade was smooth.

Before intiating the transfer and finalizing the account opening, I would have your dad confirm their SunLife account is certainly a federal regulated LIRA (or L-RRSP).
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Snizycki

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Re: Transfer from LIRA to Locked-in RRSP
« Reply #6 on: December 31, 2017, 05:47:30 PM »
Thanks for the input, everyone. I've seen another Sun Life statement and the account is called a Locked-in RRSP on that one. It seems that LIRA and LRSP are pretty much synonymous...

That, and the fact that it's basically not possible to withdraw from a LIRA without first converting it, made me comfortable to open an LRSP with Questrade and request the transfer.

Happy New Year!