# Unlocking a LIRA?



## Ben (Apr 3, 2009)

I have $2000 in a LIRA (Locked RRSP) in Ontario. I am 29. 

Is it possible for me to unlock this amount, and combine it with my regular RRSP's? 

Reading the link provided on CC's blog today to another blog, it seems I would have to wait until 55 with an amount under about $18,000, per the rules established by the FSCO.

Reading a post from Belguy this month, new rules this year allowed him _"to convert my LIRA to a New Life Income Fund at which time I was able to take 50 percent out without penalty. I opted to move this 50 percent to my RRSP account."_ This sounds doable, but still leaves me with an even more minor amount in the account. 

I know the rules are in place to protect the general populace, but it's a pain in the butt keeping it separate.


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## Four Pillars (Apr 5, 2009)

I think you are stuck for now. It may seem silly that the "small account" rule doesn't apply but I guess they are considering the possibility that you might accumulate more LIRA money in the future?

I would suggest unlocking whatever you can. There have been a lot of rule changes for locked-in accounts in the past few years so it's possible that you might eventually be able to close the account out.


FYI - Here are the non-hardship rules:

http://www.fsco.gov.on.ca/english/forms/pension/nonhardshipunlocking.asp


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## MoneyGal (Apr 24, 2009)

Why do you want to unlock it, especially if you just want to combine it with your regular RRSPs? You can do anything (investment-wise) with a LIRA that you can do with an RRSP. 

The only thing you can't do is withdraw funds prior to a relatively advanced age - and that's more about providing fairness in the tax system than it is "protecting" any segment of the population.


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## Ben (Apr 3, 2009)

MoneyGal said:


> Why do you want to unlock it, especially if you just want to combine it with your regular RRSPs? You can do anything (investment-wise) with a LIRA that you can do with an RRSP.
> 
> The only thing you can't do is withdraw funds prior to a relatively advanced age - and that's more about providing fairness in the tax system than it is "protecting" any segment of the population.


Good question. Basically has to do with wanting to keep everything with one financial institution. Convenience.

All my RRSP investments are held in a group RRSP through work (Scotiabank administers). I worked for another company previously (RRSP plan through Sunlife), and Scotia was able to accept the regular RRSP funds but not the LIRA. Scotia recommended that I move the LIRA funds to Manulife, who they partner with (or did at the time). The investment choices at Manulife seem limited, and the website interface is dismal.

1st choice would be to smash the LIRA together with RRSP funds at Scotia. The group plan is pretty decent with no-loads, no fees. Index funds have 0.63-0.69% MER. Not bad, not great. 

I am also looking into whether Scotia can now provide me a LIRA option under their roof, which they couldn't 5 years ago. 

Another option I'm looking at is tranferring the entire RRSP portfolio under TD Waterhouse roof (I'm checking with Scotia on any restrictions they have on moving the GRSP funds out). I would have to check TD fees carefully. I see from a Spidey post earlier this year that TD is charging $25 him for a LIRA account. That would be 1.25% on $2000, on top of the fund MER's I'm paying - not great. I have a lot of other questions about TD Waterhouse as well, but will save those for another day.

Depending on the outcome of the above, think I may go the route of applying to remove 50% from the LIRA, and hope for further FSCO changes in future that may allow me to unlock the rest.


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## Four Pillars (Apr 5, 2009)

You should definitely move the money to an institution that doesn't have any annual fees.

I use Questrade which doesn't have any fees.


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## MoneyGal (Apr 24, 2009)

On what basis will you petition to unlock 50%? I don't think you fit under any of the hardship or non-hardship provisions...


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## CanadianCapitalist (Mar 31, 2009)

You may also have to pay anywhere between $125 to $150 to move the LIRA out of your current institution. Since it is a small account, the receiving institution may not be inclined to provide a refund of transfer fees.

I think your best bet may be to leave it as is, especially if there are no annual fees. Yes, it sucks to have small accounts like these but it doesn't seem that there may be an alternative.


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## Four Pillars (Apr 5, 2009)

CanadianCapitalist said:


> You may also have to pay anywhere between $125 to $150 to move the LIRA out of your current institution. Since it is a small account, the receiving institution may not be inclined to provide a refund of transfer fees.
> 
> I think your best bet may be to leave it as is, especially if there are no annual fees. Yes, it sucks to have small accounts like these but it doesn't seem that there may be an alternative.


Good point - I forgot about that.

You can ask the "from" institution to waive the transfer fee. I did that once and they accepted. 

Or transfer to the same company where you have other assets - that might give you some leverage.

Or just leave well enough alone...


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## Ben (Apr 3, 2009)

Sigh. Looks like I'm stuck. Oh well.


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## Belguy (May 24, 2010)

Here are the rule changes that allow Ontario residents to transfer their LIRA account to a new LIF account and unlock 50% of it's value:

http://www.fsco.gov.on.ca/english/pensions/li-account-regchanges2009.asp


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## Ben (Apr 3, 2009)

Belguy said:


> Here are the rule changes that allow Ontario residents to transfer their LIRA account to a new LIF account and unlock 50% of it's value:
> 
> http://www.fsco.gov.on.ca/english/pensions/li-account-regchanges2009.asp


It seems to mention only LIFs or LRIFs as qualifying for the 50% unlocking. I don't know anything about LIFs - am I eligible at my age?

Dug a little bit, and certainly not worthwhile for the pittance I am talking about. Could be good info for others however.


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