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Locked-In Retirement Accounts (LIRAs)



When individuals leave their employers before they have reached retirement age, they may have to transfer the assets in their employer-sponsored pension plans to a Locked-in Retirement Savings Plan. Depending on the province in which this plan is registered, it may be called a LIRA or an LRSP.

With the exception of certain provincial restrictions, this plan has all the benefits of an RRSP. Individuals retain control over how their LIRAs are invested, subject to specific restrictions under the Income Tax Act.

Until retirement age, LIRA holders may not draw on these funds. If they want to receive income from the plan, they may transfer the assets to another acceptable locked-in vehicle that can pay out income, such as a LIF (Life Income Fund) or an LRIF (Locked-in Retirement Income Fund). In any case, when LIRA holders reach the age of 71, they must transfer the assets from their LIRA to a LIF or LRIF.