# Maxium transfer to RRSP?



## RedRose (Aug 2, 2011)

Does anyone know what the maxium transfer is to an RRSP in one given year?

I am wondering about transferring a commuted pension value. approx. $500K

I tried to do a search at Rev Canada site with no results. 
May have to phone them on Monday.


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## Daniel A. (Mar 20, 2011)

Redrose you should be able to transfer straight to locked in RRSP from the DB pension as it is fully transferable.

To your personal RRSP the amount of room you have is on your tax form.

I realize this is from your late husbands DB .


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## RedRose (Aug 2, 2011)

*Thank you Daniel,* 
Do you mean the amount on MY assessment form as the amount would be way over that figure?
By locked in does that mean I cannot move it later on into an annuity, segregated annuity or other diversified investments at a later date?
I was just looking for somewhere to park the $$$ till I can make the next series of decisions.
Thanks again for your prompt reply.


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## Saniokca (Sep 5, 2009)

Daniel A. said:


> Redrose you should be able to transfer straight to locked in RRSP from the DB pension as it is fully transferable.


This is incorrect *Correct *information *when we are talking about a death benefit that goes to the spouse*. 

IFMP a bit


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## RedRose (Aug 2, 2011)

I am 63yrs and I am leaning towards transferring 500K to an RRSP.


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## Saniokca (Sep 5, 2009)

RedRose said:


> I am 63yrs and I am leaning towards transferring 500K to an RRSP.


I forgot that you're not transferring your pension. Let me get back to you on that...


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## RedRose (Aug 2, 2011)

The Form to complete is T2151. I understand this would be a tax free roll over but not positive about that.


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## Saniokca (Sep 5, 2009)

RedRose said:


> The Form to complete is T2151. I understand this would be a tax free roll over but not positive about that.


T2151 is the locked in transfer form. But you should have received an option form where you choose pension or commuted value. if the commuted value option didn't have any language such as "$X will be transferred to your rrsp and $Y will be paid in cash" and instead just had "$X will be paid out in cash", then you're ok.


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## RedRose (Aug 2, 2011)

So does locked in mean I cannot change it from RRSP say boring mutual funds once its transferred?

I have been contemplating taking my CPP early to add to the % of my late husbands CPP so I would not have to touch this capital if I go with the 4% rule. I searched for a previous thread in case this has been discussed before.

I a just learning all this info, so it does get a tad cloudy here and there.
Thanks again for your prompt reply.


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## OhGreatGuru (May 24, 2009)

From CRA T4040:

_*Locked-in RRSP*
A locked-in RRSP is a plan containing funds transferred from a registered pension plan (RPP) for a member of the RPP. Under the pension laws of certain provinces, locked-in RRSPs are sometimes called locked-in retirement accounts *(LIRAs).* This means that the member cannot receive the transferred funds. (ie - you can't make cash withdrawals like you can with other RRSPs - OGG) They either have to stay in the plan or be transferred to another locked-in RRSP to provide the member with a retirement income.

You cannot withdraw funds from a locked-in RRSP. The money has to stay in the RRSP and will be used to buy a life annuity at retirement age.

*Note*
You may be able to withdraw funds from a locked-in RRSP under special circumstances. Contact your RRSP issuer. (This is usually for cases of financial hardship or for LIRAs holding only small amounts - OGG)

However, under the pension laws of certain provinces, pension funds or funds from a locked-in RRSP can be transferred to a locked-in RRIF. These locked-in RRIFs are sometimes called life income funds (LIFs) or locked-in retirement income funds (LRIFs).

Your employer or pension plan administrator can answer any questions you have about locked-in funds._

What you can invest it in depends on what financial instituion you transfer it to, but I believe in principle it can be invested in anything you can hold in an RRSP. LRIFS have limits on the maximum you can withdraw per year, whereas RRIFs have a minimum. The locked-in provisions essentially prevent you from collapsing the fund early.


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## Daniel A. (Mar 20, 2011)

Saniokca said:


> This is incorrect information. There is a limit to how much you can transfer on a tax sheltered basis from a DB plan. That depends on your age. Your employer should put on the option form if there is any amount that has to be either paid in cash (and therefore taxable) or, if you have unused rrsp room, you can transfer it there.
> 
> If you PM me your age I can easily calculate it...


Really are you sure


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## Daniel A. (Mar 20, 2011)

Saniokca said:


> I forgot that you're not transferring your pension. Let me get back to you on that...


The brain must have kicked in.


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## Daniel A. (Mar 20, 2011)

Redrose again I may be wrong but I do believe you can draw on a locked in RRSP after age 55 so much percent a year.


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## RedRose (Aug 2, 2011)

*OG Guru:* Wow! thank you for that information.



> You cannot withdraw funds from a locked-in RRSP. The money has to stay in the RRSP and will be used to buy a life annuity at retirement age.


This part then, if it has to go into an Annuity eventually, would it be better to put into an Annuity or a combo of Seg. Icome Funds & annuity at the outset.?
Does the Annuity from the RRSP have any legacy provisions? or do I get to choose that option later on? Only if you happen to know?

Thank you for finding the information on this so far.


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## Eclectic12 (Oct 20, 2010)

Saniokca said:


> T2151 is the locked in transfer form. But you should have received an option form where you choose pension or commuted value. if the commuted value option didn't have any language such as "$X will be transferred to your rrsp and $Y will be paid in cash" and instead just had "$X will be paid out in cash", then you're ok.


Interesting ...

The commuted value section when I left a DB pension gave two options.

1) Roll the entire amount into a LIRA.

2) Roll the pension CV into a LIRA and take the excess amount as cash, knowing it would be taxed as income.


Transfer to a vanilla RRSP was not on the list.


Cheers


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## Saniokca (Sep 5, 2009)

Eclectic we were talking about rrsp (locked in) so I automatically put that. LIRA is what should be there...
Daniel lol obviously when I was posting that I assumed it's OP's pension... I should have read your post until the end though. Anyway, I wasn't home all day and didn't have a chance to check it...


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## Daniel A. (Mar 20, 2011)

OK I'm good with that.


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## Saniokca (Sep 5, 2009)

surprise surprise... It was taking me too long to find it in the ITA so this is what I found in the Towers Watson book "Canadian Pension and Retirement Income Planning":

"Where the transfer is being made to the RRSP or defined contribution RPP of the spouse of a member payable as a death benefit in respect of a member, the amount that may be transferred is not limited by the maximum transfer value rules."

Interestingly enough I need to know this for my upcoming exam in April...


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## Four Pillars (Apr 5, 2009)

Saniokca said:


> surprise surprise... It was taking me too long to find it in the ITA so this is what I found in the Towers Watson book "Canadian Pension and Retirement Income Planning":
> 
> "Where the transfer is being made to the RRSP or defined contribution RPP of the spouse of a member payable as a death benefit in respect of a member, the amount that may be transferred is not limited by the maximum transfer value rules."
> 
> Interestingly enough I need to know this for my upcoming exam in April...


I didn't know this. Mind you, I'm not writing an exam in April either. 

I would have thought that this type of transfer would be to a locked-in account, not an RRSP.


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## RedRose (Aug 2, 2011)

*San:*


> "Where the transfer is being made to the RRSP or defined contribution RPP of the spouse of a member payable as a death benefit in respect of a member, the amount that may be transferred is not limited by the maximum transfer value rules."
> 
> Interestingly enough I need to know this for my upcoming exam in April...


Thank you so much for researching this info. I am glad it will serve you too...a win/win. I can finally exhale...getting there.


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