# Question on Locked-In Retirement Accounts (LIRA)



## Freedom51

Questions 1: When putting pension funds into a lira, does it all have to go to one financial institution or can it be split amongst a few? 
Question 2: If you put more than $100,000.00 into a LIRA in one financial institution, are you only insured (CDIC) for the first $100,000.00 ?

Thank you for your help.


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## Four Pillars

1 No
2 Yes


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## Freedom51

Thank you.


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## Four Pillars

Just reread your question.

It's possible that the pension fund won't do the payout to more than one financial institution, but you can get around this doing a transfer(s) later on.

Ie do the pension payout to ABC Financial. Then you transfer some of the money to DEF Financial and any other financial institution as well.


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## caricole

A few clarifications on LIRA

Things to consider

In Quebec, there are 3 types of RRSP

1) Self directed RRSP

2) LIRA of provincial jurisdiction

3) LIRA of Federal jurisdiction

You can TRANSFER some LIRA to the SELF DIRECTED PLAN

The LIRA of Provincial Jurisdiction: you can TRANSFER gradually taxfree to your seldirected plan...± 22K per year by following the proper procedure

The LIRA of Federal Jurisdiction: you can transfer, once in a liftime 50% of the value of the plan from LIRA to SELFDIRECTED RRSP....at the institution of your choice....and keep the rest in the form of the original LIRA, this change came in effect in 2008, but again, you have to follow the proper procedure


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## RedRose

I too was wondering this.
If a T2151 form is used to transfer a commuted value of a pension to a Registered Plan.
I believe that becomes locked-in to a LIRA, but you are saying it can be transferred at a later date?

What penalties and fees would one incur to do the diversification at a later date, approximate ball park if anyone knows please?

OMERS pension fund looks favourable, also an Annuity or Segregated Income Fund with an Insurance company and some for 'float.'
Do this seem prudent?

Cheers and Thank you again, Rose


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## Brian Weatherdon CFP

Hi 51: I would answer this with "Yes" and "No".....in that order. When processing the transfer from the pension plan, the administrator wants the simplicity of having one payee to whom the commuted money will be sent. At that point, you have a LIRA....sitting wherever you have chosen to invest it. Generally you can then process a partial transfer to another institution(s) where you choose to place the rest of your LIRA. <<>> You mention CDIC so probably you intend to invest in GICs or other deposits....which mind you are paying only 2% or less these days. So may I propose, you may want to parallel your GIC portion with funds that can offer a strong dividend yield that might even be in the >4% range. That's a matter to address with a certified advisor.
Best wishes!
BW


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## RedRose

I will go into the Bank this week to complete that form.

Thank YOU so much *Brian* for the informative reply. 
Will it cost a fee everytime I transfer to another investment vehicle? Like an hybrid annuity? Divdend yielding stocks and such?
Thanking you ahead of time if you know.


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