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LIRA (Locked In RRSP)
December 17, 2014
11:45 am
Brimleychen
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Any suggestion where to open LIRA account? I only see the big banks and lifecos for these. Do you have any other alternatives? Thanks in advance.

December 17, 2014
11:56 am
Loonie
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I know that some,but by no means all, credit unions have them. It might be worth your while to look around your province.

Here is one in Saskatchewan that does: http://www.leroycu.ca/ At least this tells you it's possible.

In Ontario, DUCA seems to offer them, but it is not very obvious from their website.

I think this is one question where you need to ask individual institutions. Some of them do offer it, but tend to assume it under the general label of RSP/RIF rather than get into detail about it in their websites.

December 17, 2014
12:22 pm
Greg Franklin
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BrimleyChen, I only see LIF's listed on Duca Credit Union's website for rates so I am assuming that if they offer LIF's they have to have LIRA's too but who knows if this is true or not, http://www.duca.com/rates.

I found this on Duca's website that looks to be helpful and explain something, http://www.duca.com/myMoney/Li.....nvestments.

If they do accept LIRA's, their 3.00%, 7 year rate is not bad considering where interest rates are and have been dropping lately to almost all time lows, July-2012, bond market will impact GIC, RRSP, RRIF, RESP, TFSA, LIRA, LRIF, LIF rates if they stay down.

December 17, 2014
1:05 pm
Greg Franklin
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Brimelychen, maybe this information about LIRA's, locked in RRSP may help, http://www.ratesavecanada.ca/i.....ticle=lira.

They have a 3.00% 5 year GIC rate listed too but I don't know if this applies to LIRA's, locked-in RRSP's.

December 17, 2014
4:07 pm
Brimleychen
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Greg / Loonie,

Thanks for info and research. Try to call Oaken, Peoples trust, and obviously they are not sure either. But all the banks provide LIRAs.

December 17, 2014
4:38 pm
Greg Franklin
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Brimleychen, QuintEssential Credit Union has 2.80% 2 year and 3.09% 5 year GIC, RRSP, RRIF, TFSA special rates.

Maybe you can give them a call and see if they have LIRA's, locked-in RRSP's as well. http://www.qcu.ca/Personal/Rat...../Specials/.

Maybe you can give State Bank of India Canada a call as they may have 5 year 3.00% LIRA's, lock-in RRSP's like their 3.00% RRSP's and TFSA's, http://www.sbicanada.com/Pdfs/.....ntrate.pdf.

It is worth a try, Brimleychen.sf-smile

December 17, 2014
5:00 pm
Greg Franklin
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Brimleychen, there is a Manitoba credit union that has LIRA and LIF accounts available, Crosstown Civic Credit Union has 2.60% 30 month, 2.75% 48 month, 2.85% 72 month, 2.90% 84 month.

1 year rates are 2.25% and 5 year rates are 2.80%. You can see all their rates at http://www.crosstowncivic.mb.c.....;Itemid=83.

You can also read about LIRA's at http://www.crosstowncivic.mb.c.....;Itemid=71.

I hope this helps you, Brimleychen and others. Take care and if I find anything else I will post it for sure.sf-smile

December 18, 2014
10:10 am
Greg Franklin
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Brimleychen, they contacting Access Credit Union about LIRA, locked-in RRSP accounts, http://www.accesscu.ca.

They currently have 2.35% 18 month, 2.60% 30 month, 2.85% 55 month GIC, RRSP, TFSA rates. It could be worth a try.sf-smile

December 18, 2014
10:23 am
Greg Franklin
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Brimleychen, Ukranian Credit Union has 2.00% 10 months, 2.20% 23 months, 2.50% 33 months, 2.60% 42 months, 2.70% 46 months, 2.75% 58 months, http://www.ukrainiancu.com/UCU.

These are all GIC, RRSP, RRIF, TFSA eligible so there is a possibility that they accept LIRA, locked in RRSP accounts as well.

December 22, 2014
1:19 pm
Greg Franklin
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Brimelychen and anyone else interested in finding a possible financial institution to transfer their LIRA, locked in RRSP accounts, Community Trust Company offers them as part of their registered plans, http://www.communitytrust.ca/lira/.

I don't don't know if they have their 3.00%, 5 year GIC's available for their LIRA, locked in RRSP's. You will have to check with them.

December 22, 2014
2:44 pm
Norman1
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Brimleychen said

Any suggestion where to open LIRA account? I only see the big banks and lifecos for these. Do you have any other alternatives? Thanks in advance.

A LIRA is an RRSP account that subject to locking-in requirements of a federal or a provincial pension act. So, a potential institution would have to offer RRSP's. If they don't do RRSP's, then they certainly won't do a LIRA.

I think it would be useful to first determine which locking-in requirements the LIRA must meet. A federal one? An Ontario one? A Manitoba one?

Some of the smaller institutions may not handle all the possible locking-in requirements out there. For example, a small Ontario institution may only offer federal and Ontario LIRA's.

Also, my understanding is that one cannot combine LIRA's that are subject different to locking-in requirements. For example, if one has a Ontario LIRA and federal LIRA, they must be kept separate.

December 22, 2014
11:10 pm
Doug
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Brimleychen said

Any suggestion where to open LIRA account? I only see the big banks and lifecos for these. Do you have any other alternatives? Thanks in advance.

Forgive me if this follow-up question states the obvious, but sometimes, people are quick to "chime in" with their "best solutions" without fully understanding what the OP is asking. Are you trying to open a brand new Locked-In RRSP, trying to consolidate former pension plan assets into one Locked-In RRSP or just transferring one former pension plan (DC or DB) from a recent former employer into a Locked-In RRSP?

If it is the former, a locked-in RRSP (or LIRA) is simply a regular RRSP with the proviso that funds are "locked in" until age 65 (there are certain provisions for unlocking at age 55 in some provinces or under certain other circumstances that can get quite technical and for which I'll spare you). If you have a regular RRSP, there's no benefit to a locked-in RRSP. If you're over 65, you may even be able to co-mingle your former pension assets into a regular RRSP or, at the very least, into one RRIF. Check with your financial advisor for details.

If it's one of the latter, generally, self-directed discount brokerages and full-service brokerages are your best bet for more complex locked-in RRSP plans of former pension plan assets and can provide you with a T2151 CRA form to transfer-in or consolidate assets (either the CRA form or a customized version for their brokerage) along with your current pension plan statement is usually all that is required (besides account opening forms, if done then). The brokerages will even usually reimburse you any transfer out fee(s) charged by your pension plan administrator, up to between $125-$150 per account (not per person). As well, the banks are often very reluctant to reimburse such fees. And besides, you can hold most savings accounts and many GICs from different providers with different brokerages. sf-cool

Hope that helps!

Cheers,
Doug

December 24, 2014
9:46 am
Brimleychen
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Thanks for all the replies. My friend decided to move the pension to investor edge LIRA. It looks like cibc has one of lower fee for the trading, and provides quite a range of prodcuts like long term corporate bonds, and emerging market bond etc which can have higher than 5% yield in the next 20 years. Of course, it comes with certain risks.

The following link is helpful if you want to understand lira
https://www.investorsedge.cibc.com/ie/education-centre/topics/retirement/early-retirement.html

December 24, 2014
10:23 am
Greg Franklin
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Brimleychen, I noticed that most longer term corporate coupon paying bonds have net yields, including commission of around 4.20% to 4.30%, zero coupon bonds are not that much higher maybe 4.40% to 4.50% unless you go longer than 20 years and get lower quality bonds maybe not junk or high yield but the lower quality corporate zeros.

You can find close to junk, high yield corporate bonds, zeros that are the higher quality in that market segment for 5%. However, corporate junk, high quality coupon paying bonds of 6%, 7%+ is getting into more risky territory than most people can handle.

They may not really know what they are really getting intosf-confused

December 25, 2014
8:14 am
Brimleychen
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Greg Franklin said

Brimleychen, I noticed that most longer term corporate coupon paying bonds have net yields, including commission of around 4.20% to 4.30%, zero coupon bonds are not that much higher maybe 4.40% to 4.50% unless you go longer than 20 years and get lower quality bonds maybe not junk or high yield but the lower quality corporate zeros.

You can find close to junk, high yield corporate bonds, zeros that are the higher quality in that market segment for 5%. However, corporate junk, high quality coupon paying bonds of 6%, 7%+ is getting into more risky territory than most people can handle.

They may not really know what they are really getting intosf-confused

You're right. One of his buys is Emhy (emerging market high yield bond etf) which is a bit risky.

December 26, 2014
8:19 am
Loonie
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I find it interesting how the gov't can be so concerned about boxing in LIRAs so that you can't take the money out too soon etc., claiming to protect us from our folly, yet they permit a lot of risky investments.

December 26, 2014
4:51 pm
Greg Franklin
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I remember that not just for RRSP's but also LIRA's, locked in RRSP's and RRIF's, LRIF's, LIF's had a 30% foreign content limit many years back.

I think it was maybe 10, 11 or more years back that they changed this legislation to allow for investors to have more than 30% foreign content in RRSP's, RRIF's, LIRA's, locked-in RRSP's, LRIF's, LIF's.

However, that was a federal legislation and pensions and LIRA's, LRIF's, LIF's are provincial legislation.

This maybe why there was a disconnect between them trying to keep locked-in retirement accounts, LIRA's and RRSP's from being less risky and putting maximum payouts annually or lump sum payouts through LIRA's, LRIF's, LIF's.

Even with that 30% foreign content rule with RRSP's, RRIF's, LIRA's, LRIF's, LIF's, it still did not protect against Canadian lower quality bonds, zeros, Canadian high yield, junk bonds, zeros that can be invested in these retirement accounts locked in or not.

A few come to mind like lower quality, high yield, junk bonds like Air Canada, Bombardier, Sherrit International, Transalta, Atlantic Power, Rona Inc., Ford Credit Canada, Quebecor Media, Corus Entertainment.

There is a whole list of them at Questrade plus other bonds and strip bonds with higher and lower quality, http://www.questrade.com/learn.....s_bulletin.

February 7, 2021
11:24 am
Bill
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A family member has asked me a question, maybe someone here knows.

He likes to change employers every few years, so now he's got a few former defined contribution pension plan amounts from various employers (coincidentally, so far all plans had been run by Manulife), so my understanding is these are now all separate LIRA accounts. At the rate he's going by retirement time he'll have a lot of these things kicking around in various places.

He's thinking of consolidating them into a single LIRA account he will open at, say, TD Direct Investing. Presently these LIRAs contain various Manulife mutual funds, I think designed only for workplace pension plans (I'm guessing they're copies of Manulife mutual funds offered outside of workplace pension plans). The plan is, once he's directly transferred them into his new TD Direct Investing LIRA account, to sell/redeem these mutual funds and then buy the investments he wants in the account.

Will this work?

February 7, 2021
1:42 pm
topgun
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I am qualified for this. I got LIRA money from two long time employers. I had the cash deposited into one account years ago. I invested the money where I wanted. In Dec 2020 the account was automatically converted to a RLIF/LIF. I turned 71 last year. The minimum withdrawal is the same as the rules for RIF. 5.28% this year. There is also a maximum amount you can withdraw each year. The maximum is determined by your province of residence.

https://nesbittburns.bmo.com/getimage.asp?content_id=83139

Have a Great Day

February 7, 2021
2:12 pm
Loonie
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Bill, are you sure that what your relative has is LIRAs? With the one I used to have (I emptied it a couple of years ago), I was given the option by the employer as to where I wanted it to be transferred to and could move it around wherever I wanted by transfers, like a RSP/RIF. Accordingly, if I'd had more than one, it wouldn't have been difficult to amalgamate them.
I would check your relative's paper work first, to confirm what he or she has and if all the same. Your description doesn't sound exactly like an LIRA, but the info you received might be confusing.

I gather that all these plans are in Manulife mutual funds. Does that mean they are held in a Manulife account or through some other agent or broker? If they are held by a Manulife account, then I think he'd be better off amalgamating them before transferring them to TDDI or whatever, if possible. Otherwise, he could end up with a lot of transfer fees, which I would think would be waived if kept "within the family". But I don't know if an amalgamation can be done, at either stage. It may depend on what these plans are, legally.

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