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LIRA (Locked In RRSP)
February 7, 2021
2:28 pm
Norman1
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One should check the LIRA's and see which provincial pension act each is governed by. It won't be possible to amalgamate them if each LIRA is governed by a different provincial pension act.

Some governing pension acts will allow one to unlock the LIRA's when the total amount in all the LIRA's under the act is small. It could be worthwhile to look into that possibility.

There was a discussion consolidate RRSP's? about unlocking a LIRA governed by the Ontario pension act.

The maximum withdrawal is determined by the pension act that governs, not by which province the pensioner lives.

February 7, 2021
5:01 pm
Bill
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Everything (employers, relative) is in Ontario. The relative just left everything where it was, i.e. in the companies' pension plans, when they left, so my understanding is when you exit the pension plan your remaining account balance becomes a LIRA, a locked-in retirement account. Relative continues to get year-end statements from Manulife for each LIRA as to how the funds have done, balances, etc. One is about $60K, the other under $10K. Now they're on their 3rd similar pension plan and they're in their mid-30s, so they're thinking in 30 years or so they're going to be getting a lot of small pension cheques from their various LIRAs.

It might be too late now, the options were there when the person left the plan and by leaving things as they were they've now got these LIRAs out there, probably too late to turn them into cash and then transfer it to a TD DI LIRA account. topgun, did you get your money out from the two employers' plans at the time you left or was it some time/years later?

February 7, 2021
6:21 pm
topgun
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The first I got 5 months after I left the second company with long service.

The first company the value was in the hundreds of dollars when I left. I left it there. My pension at 65 was going to be $52 per month. After 16 years I transferred out to LIRA. Funds merged. Pleased to have one RLIF/LIF.

Have a Great Day

February 7, 2021
6:36 pm
Bill
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Thanks, topgun, sounds like time elapsed might not be an obstacle.

February 8, 2021
7:19 am
Londonguy
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Bill said
Everything (employers, relative) is in Ontario. The relative just left everything where it was, i.e. in the companies' pension plans, when they left, so my understanding is when you exit the pension plan your remaining account balance becomes a LIRA, a locked-in retirement account. Relative continues to get year-end statements from Manulife for each LIRA as to how the funds have done, balances, etc. One is about $60K, the other under $10K. Now they're on their 3rd similar pension plan and they're in their mid-30s, so they're thinking in 30 years or so they're going to be getting a lot of small pension cheques from their various LIRAs.

It might be too late now, the options were there when the person left the plan and by leaving things as they were they've now got these LIRAs out there, probably too late to turn them into cash and then transfer it to a TD DI LIRA account. topgun, did you get your money out from the two employers' plans at the time you left or was it some time/years later?  

I've not only seen but been in this movie. My spouse had a defined benefit plan at a former employer -- when she left after 17 years we took her commuted pension value with her rather than leave it in the hands of what I viewed to be a very poor pension administrator with lousy returns.

Before getting too excited he needs to first find out if the rules of these former pension plans will allow him to transfer his balance out at this late date. It is not a given. Evidently he elected to not take his pension into a LIRA that he controls when he ended his employment -- do not assume that they will let him change that election now.

If these old plan amounts are indeed transferable, there should be no problem getting TD to open up an Ontario-rules LIRA and then completing 1033s for each of his former plans to consolidate them at TDDI. Convert everything into cash first to eliminate any foot dragging at the source over the move. Once the funds arrive at the new LIRA, he can re-invest the money at his own discretion.

February 8, 2021
8:52 am
Norman1
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Wouldn't someone have multiple registered pension plans (RPP's) and not multiple LIRA's, had he or she just left the contributions in the company pension plans?

It sounds like the relative had already commuted his pension plans because of the multiple LIRA's.

February 8, 2021
9:18 am
Bill
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Sorry, the confusion is my fault. I made the assumption, in the case of defined contribution plans, that if you leave your money in the pension plan when you leave the employer that you are no longer part of the pension plan, it's now a LIRA, i.e. locked in. Thought I saw something to that effect on the internet. So, no, there are no LIRAs I guess, they are RPP accounts still, it's just pension funds that are locked in. And no commuted value applies, to my way of thinking, because that applies to defined benefit plans, in defined contribution plans you just have what you personally have.

Londonguy, you're right on, what you describe is the plan, but step one is finding out if it's too late to move these funds. The reason this came up is the relative showed me the info for his new place of employment pension plan, also run by Manulife, and I noticed a line in it that said amounts from other Manulife workplace pension plans could be moved into the current employer's plan. That's what got me thinking the former amounts could be moved so I figured TD DI LIRA account be another option.

February 8, 2021
9:30 am
Loonie
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It's not clear from what Bill has said that these are actually LIRAs.
As I said earlier, #20, the first thing to do is to check precisely what they are called. What does it say on the statements he receives from Manulife?

February 8, 2021
9:58 am
Bill
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I've said I agree with Norman1, these are RPPs and not LIRAs, it was an assumption (appears to be wrong based on responses here) I made after cursory online reading. I've zero experience with LIRAs, didn't even know they existed until relatively recently.

Anyway, whatever the accounts are, the focus is finding out if they're stuck where they are or not. Next time relative is coming over I'll get him to bring his statements again for a closer look and figure out who to call to see if it's too late to move the money out to either his current workplace plan or his own LIRA account somewhere.

February 8, 2021
10:24 am
Londonguy
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Bill said
I've said I agree with Norman1, these are RPPs and not LIRAs, it was an assumption (appears to be wrong based on responses here) I made after cursory online reading. I've zero experience with LIRAs, didn't even know they existed until relatively recently.

Anyway, whatever the accounts are, the focus is finding out if they're stuck where they are or not. Next time relative is coming over I'll get him to bring his statements again for a closer look and figure out who to call to see if it's too late to move the money out to either his current workplace plan or his own LIRA account somewhere.  

I strongly doubt the statement will be informative. You're going to have to speak to a plan administrator who understands the deets of that particular plan and can therefore tell you what your options are, now or in the future if the amount has to stay there

February 8, 2021
11:17 am
Bill
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I know, Londonguy, as I said I figure the statements will have the contact info we need. Thanks again.

February 8, 2021
12:51 pm
Loonie
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I had thought the statements would tell us what sort of beast it was, whether LIRA, RPP or something else.
Anyway, if it's RPP, I don't know much about that. Anyone I've known who was presented with the commutation option had to do it when they retired or not at all, if that's relevant.
I suspect that londonguy's earlier comments are on the right track.

I don't know much about these kinds of pension plans. It just seems odd to me that Manulife would be the apparent fund manager and also invest the funds solely in their own mutual funds.

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