The Saskatchewan LIRA/PRRIF Transfer Agreement: What You Need to Know
If you have a Locked-In Retirement Account (LIRA) or a Locked-In Retirement Income Fund (PRRIF) in Saskatchewan, you may be interested in a recent transfer agreement that could affect your retirement savings. The agreement, signed in December 2019, allows for the transfer of funds between LIRAs and PRRIFs, providing more flexibility and options for retirees.
What are LIRAs and PRRIFs?
LIRAs and PRRIFs are types of retirement accounts that are subject to Canadian pension legislation. These accounts are typically created when an individual transfers funds from a pension plan, or from an employer-sponsored RRSP, into a locked-in account. The funds in these accounts cannot be withdrawn as cash, but must be used to provide retirement income.
LIRAs are designed for individuals who have left a company`s pension plan or who have received a lump-sum payment from their employer`s pension plan. PRRIFs, on the other hand, are for individuals who have reached the age of 71 and are required to convert their RRSPs into a retirement income product.
What is the Saskatchewan LIRA/PRRIF Transfer Agreement?
The Saskatchewan LIRA/PRRIF Transfer Agreement is a recent agreement between the Saskatchewan Financial Services Commission and the Canada Revenue Agency. The agreement allows Saskatchewan residents to transfer funds from their LIRAs to PRRIFs, and vice versa. This means that retirees now have more options for managing their retirement income.
Why is this important?
The transfer agreement provides retirees with more flexibility and options for managing their retirement income. For example, if you have a LIRA and your retirement income needs have changed, you can transfer funds to a PRRIF to provide a more predictable income stream. Alternatively, if you have a PRRIF and want to take advantage of higher investment returns, you can transfer funds to a LIRA and invest in higher-risk assets.
It`s important to note that there are some restrictions on transferring funds between LIRAs and PRRIFs. For example, the transfer must comply with federal and provincial pension legislation, and the funds must be transferred directly from one account to another. Additionally, fees and taxes may apply when transferring funds.
How do I transfer my funds?
If you`re interested in transferring funds between your LIRA and PRRIF, you should contact your financial institution or advisor. They can provide you with more information on the transfer process and help you determine whether it`s the right option for your retirement income needs.
In conclusion, the Saskatchewan LIRA/PRRIF transfer agreement provides retirees with more flexibility and options for managing their retirement income. If you have a LIRA or PRRIF in Saskatchewan, you may want to consider transferring funds to take advantage of these options. Be sure to consult your financial institution or advisor for more information.