All banks, credit unions, trust companies and insurance companies that offer blocked pension accounts (LIRAs), life income funds (LIFs) and locked-in locked income funds (LRIF) must be on the Superintendent`s list of financial institutions that offer blocked pension products in order to accept blocked fund transfers. The only time a direct transfer to a spouse`s registered plan is necessary is compliance with the terms of a divorce or separation agreement. In this case, no contribution space is required and the transfer does not generate taxable income. Suppose Jane released $100,000 of her frozen funds and transferred the money to her own RRSP or RRIF. If she wants to transfer all or part of the money to one or more others, it is the same as withdrawing the money and then donating it to someone else. It is taxed on the amount withdrawn. If a doctor has certified that you have a reduced life expectancy due to a physical or mental disability, the total value of your funds can be unlocked. In general, for financial reasons, withdrawals can only be made once a year, unless you no longer have a blocked account. However, if there is only one blocked account and the maximum amount allowed has not been recovered, another request for payment can be made if it has been made within 30 days of the first payment. If you have more than one account and want to make a payment after the fact, the request for 2nd payment must also be made within 30 days of the first payment.

The total amount of all payments must be less than the maximum amount allowed for the year. In some circumstances, it may be possible to pay for your plan instead of being transferred to a blocked account if the value of the plan is low or if you have a reduced life expectancy. Talk to your plan administrator. Some provinces allow an entire account or part of a blocked account to be “unlocked” without the above restrictions. For information by province, follow the links to your pension plan regulator, in the RPP regulator table or in the following links: Note that the release of these funds loses the protection of creditors who are made available to the frozen funds. The Office of Superintendent of Financial Institutions (OSFI) website states that unlocked funds can be transferred to any RRSP or RRIF, not necessarily to a holder of the blocked funds. This statement only disturbs the problem because a transfer to another person is the same as a taxable withdrawal and a subsequent gift. People aged 55 and over are entitled to a one-time conversion of up to 50% of the value of the stock into a savings vehicle with a tax benefit with no maximum payment limit. If the funds are owned by the RRSP or the RRIF of the blocked fund, there is no need for a contribution space and the owner is taxed only when the funds are then withdrawn from the RRSP or the RRIF. If the recipient (spouse or otherwise) wishes to deposit the gift to his RRSP, he should have sufficient contribution space.

See also – Links to all information on disability-related TaxTips.ca. The Office of the Superintendent of Financial Institutions Canada (OSFI) provides pension information on Pension Unlocking provides more information on government-regulated pension plans. If your federally regulated pension plans have been transferred to one: as soon as you have been approved to offer LIF and LIRA contracts to Alberta, a copy of the AIRA or the corresponding LIF must be made available to the owners of LIRA and LIF. Forms for pension plan members and administrators registered under the Employment Pension Plan Act. Tax advice: contact your retirement plan regulator to determine what you can do with your LIRA – don`t rely solely on information provided by your financial institution.