Pooled Registered Pension Plans Regulations (SOR/2012-294)

Marginal note:Prescribed restricted locked-in savings plan

• 39 (1) A restricted locked-in savings plan must

  • (a) provide that the funds may only be

    • (i) transferred to another restricted locked-in savings plan,

    • (ii) transferred to a pension plan if the plan permits such a transfer and if the pension plan administers the benefit attributed to the transferred funds as if the benefit were that of a pension plan member,

    • (iii) transferred to a PRPP,

    • (iv) used to purchase an immediate life annuity or a deferred life annuity, or

    • (v) transferred to a restricted life income fund;

  • (b) provide that, on the death of the holder of the restricted locked-in savings plan, the funds shall be paid to the holder’s survivor by

    • (i) transferring the funds to another restricted locked-in savings plan or to a locked-in RRSP,

    • (ii) transferring the funds to a pension plan if the pension plan permits such a transfer and if the pension plan administers the benefit attributed to the transferred funds as if the benefit were that of a pension plan member,

    • (iii) transferring the funds to a PRPP,

    • (iv) using the funds to purchase an immediate life annuity or a deferred life annuity, or

    • (v) transferring the funds to a life income fund or to a restricted life income fund;

  • (c) provide that, subject to subsection 53(3) of the Act, the funds, or any interest or right in those funds, shall not be transferred, charged, attached, anticipated or given as security and that any transaction appearing to do so is void or, in Quebec, null;

  • (d) set out the method of determining the value of the restricted locked-in savings plan, including the valuation method used to establish its value on the death of the holder or on a transfer of assets;

  • (e) provide that, in the calendar year in which the holder of the restricted locked-in savings plan reaches 55 years of age or in any subsequent calendar year, the funds may be paid to the holder in a lump sum if the holder

    • (i) certifies that the total value of all assets in all locked-in RRSPs, life income funds, restricted locked-in savings plans and restricted life income funds that were created as a result of the transfer, a transfer under the Pension Benefits Standards Act, 1985 or a transfer from another PRPP is not more than 50% of the Year’s Maximum Pensionable Earnings, and

    • (ii) obtains the consent of their spouse or common-law partner, if any, and completes and gives a copy of Form 2 and Form 3 of the schedule to the financial institution with whom the contract or arrangement for the restricted locked-in savings plan was entered into;

  • (f) provide that the holder of the restricted locked-in savings plan may withdraw an amount from that plan up to the lesser of the amount determined by the formula set out in subsection 38(2) and 50% of the Year’s Maximum Pensionable Earnings minus any amount withdrawn in the calendar year under this paragraph or paragraph 38(1)(e), 40(1)(k) or 41(1)(k)

    • (i) if the holder certifies that they have not made a withdrawal in the calendar year under this paragraph or paragraph 38(1)(e), 40(1)(k) or 41(1)(k) other than within the last 30 days before the day on which the certification is made,

    • (ii) if,

      • (A) in the event that the value determined for M in subsection 38(2) is greater than zero,

        • (I) the holder certifies that they expect to make expenditures on a medical or disability-related treatment or adaptive technology during the calendar year in excess of 20% of their expected income for that calendar year determined in accordance with the Income Tax Act, other than any amount withdrawn in the calendar year under this paragraph or paragraph 38(1)(e), 40(1)(k) or 41(1)(k), and

        • (II) a physician certifies that the medical or disability-related treatment or adaptive technology is required, or

      • (B) the holder’s expected income for the calendar year determined in accordance with the Income Tax Act — other than any amount withdrawn under this paragraph or paragraph 38(1)(e), 40(1)(k) or 41(1)(k) within the last 30 days before the day on which the certification is made — is less than 75% of the Year’s Maximum Pensionable Earnings, and

    • (iii) if the holder obtains the consent of their spouse or common-law partner, if any, and completes and gives a copy of Form 1 and Form 2 of the schedule to the financial institution with whom the contract or arrangement for the restricted locked-in savings plan was entered into; and

  • (g) provide that the holder of the restricted locked-in savings plan who has ceased to be a resident of Canada for at least two years may withdraw any amount from that plan.

• Marginal note:Lump sum

  (2) The restricted locked-in savings plan shall provide that the funds may be paid to the holder in a lump sum if a physician certifies that, owing to mental or physical disability, the holder’s life expectancy is likely to be considerably shortened.

Marginal note:Prescribed restricted life income fund

• 40 (1) A restricted life income fund is prescribed for the purposes of paragraphs 50(1)(b) and (3)(b), 53(4)(b) and 54(2)(b) of the Act if it

  • (a) sets out the method of determining the value of the restricted life income fund, including the valuation method used to establish its value on the death of the holder or on a transfer of assets;

  • (b) provides that the holder of the restricted life income fund shall, at the beginning of each calendar year or at any other time agreed to by the financial institution with whom the contract or arrangement was entered into, decide the amount to be paid out of the fund in that year;

  • (c) provides that in the event that the holder of the restricted life income fund does not notify the financial institution with whom the contract or arrangement for the restricted life income fund was entered into of the amount to be paid out of the fund in a calendar year the minimum amount determined in accordance with the Income Tax Act shall be paid out in that year;

  • (d) provides that for any calendar year before the calendar year in which the holder of the restricted life income fund reaches 90 years of age, the amount of income paid out of the life income fund shall not exceed the amount determined by the formula

    C/F

    where

    C

    is the balance in the holder’s account

    • (a) at the beginning of the calendar year, or

    • (b) if the balance at the beginning of the calendar year is zero, on the day on which the election was made; and

    F

    is the value, at the beginning of the calendar year, of an annual $1 payment, payable on January 1 of each year between the beginning of that calendar year and December 31 of the year in which the holder reaches 90 years of age, established using an interest rate that is

    • (a) for each of the first 15 years, not more than the monthly average yield on Government of Canada marketable bonds of maturity over 10 years, as published by the Bank of Canada, for the month of November before the beginning of each calendar year, and

    • (b) for any subsequent year, not more than 6%;

  • (e) provides that, for the calendar year in which the contract or arrangement was entered into, the amount determined under paragraph (d) shall be multiplied by the number of months remaining in that year and then divided by 12, with any part of an incomplete month counting as one month;

  • (f) provides that if on the day on which the restricted life income fund was established part of the fund was composed of funds that had been held in another restricted life income fund of the holder earlier in the calendar year in which the fund was established, the amount determined under paragraph (d) is deemed to be zero in respect of that part of the fund for that calendar year;

  • (g) provides that the funds in the restricted life income fund may only be

    • (i) transferred to another restricted life income fund,

    • (ii) transferred to a restricted locked-in savings plan, or

    • (iii) used to purchase an immediate life annuity or a deferred life annuity;

  • (h) provides that, on the death of the holder of the restricted life income fund, the funds shall be paid to the holder’s survivor by

    • (i) transferring the funds to another restricted life income fund or to a life income fund,

    • (ii) transferring the funds to a locked-in RRSP or to a restricted locked-in savings plan, or

    • (iii) using the funds to purchase an immediate life annuity or a deferred life annuity;

  • (i) provides that, subject to subsection 53(3) of the Act, the funds, or any interest or right in those funds, shall not be transferred, charged, attached, anticipated or given as security and that any transaction appearing to do so is void or, in Quebec, null;

  • (j) provides that, in the calendar year in which the holder of the restricted life income fund reaches 55 years of age or in any subsequent calendar year, the funds may be paid to the holder in a lump sum if the holder

    • (i) certifies that the total value of all assets in all locked-in RRSPs, life income funds, restricted locked-in savings plans and restricted life income funds that were created as a result of the transfer, a transfer under the Pension Benefits Standards Act, 1985 or a transfer from another PRPP is not more than 50% of the Year’s Maximum Pensionable Earnings, and

    • (ii) obtains the consent of their spouse or common law partner, if any, and completes and gives a copy of Form 2 and Form 3 of the schedule to the financial institution with whom the contract or arrangement for the restricted life income fund was entered into;

  • (k) provides that the holder of the restricted life income fund may withdraw an amount from that fund up to the lesser of the amount determined by the formula set out in subsection 38(2) and 50% of the Year’s Maximum Pensionable Earnings minus any amount withdrawn in the calendar year under this paragraph or paragraph 38(1)(e), 39(1)(f) or 41(1)(k)

    • (i) if the holder certifies that they have not made a withdrawal in the calendar year under this paragraph or paragraph 38(1)(e), 39(1)(f) or 41(1)(k) other than within the last 30 days before the day on which the certification is made,

    • (ii) if,

      • (A) in the event that the value determined for M in subsection 38(2) is greater than zero,

        • (I) the holder certifies that they expect to make expenditures on a medical or disability-related treatment or adaptive technology during the calendar year in excess of 20% of the holder’s expected income for that calendar year determined in accordance with the Income Tax Act, other than any amount withdrawn in the calendar year under this paragraph or paragraph 38(1)(e), 39(1)(f) or 41(1)(k), and

        • (II) a physician certifies that the medical or disability-related treatment or adaptive technology is required, or

      • (B) the holder’s expected income for the calendar year determined in accordance with the Income Tax Act — other than any amount withdrawn under this paragraph or paragraph 38(1)(e), 39(1)(f) or 41(1)(k) within the last 30 days before the day on which the certification is made — is less than 75% of the Year’s Maximum Pensionable Earnings, and

    • (iii) if the holder obtains the consent of their spouse or common law partner, if any, and completes and gives a copy of Form 1 and Form 2 of the schedule to the financial institution with whom the contract or arrangement for the restricted life income fund was entered into;

  • (l) provides that, if the restricted life income fund is established in the calendar year in which the holder of the fund reaches 55 years of age or in any subsequent calendar year, the holder of the fund may transfer 50% of the funds in that fund to a registered retirement savings plan or a registered retirement income fund within 60 days after the day on which the restricted life income fund is established if

    • (i) the restricted life income fund was created as the result of the transfer, a transfer under the Pension Benefits Standards Act, 1985, a transfer from another PRPP or a transfer from a locked-in RRSP or a life income fund, and

    • (ii) the holder obtains the consent of their spouse or common law partner, if any, and completes and gives a copy of Form 2 of the schedule to the financial institution with whom the contract or arrangement for the restricted life income fund was entered into; and

  • (m) provides that the holder of the restricted life income fund who has ceased to be a resident of Canada for at least two years may withdraw any amount from that fund.

• Marginal note:Lump sum

  (2) The restricted life income fund shall provide that the funds may be paid to the holder in a lump sum if a physician certifies that, owing to mental or physical disability, the holder’s life expectancy is likely to be considerably shortened.

Marginal note:Prescribed life income fund

• 41 (1) A life income fund is prescribed for the purposes of paragraphs 50(1)(b) and (3)(b), 53(4)(b) and 54(2)(b) of the Act if it

  • (a) sets out the method of determining the value of the life income fund, including the valuation method used to establish its value on the death of the holder or on a transfer of assets;

  • (b) provides that the holder of the life income fund shall, at the beginning of each calendar year or at any other time agreed to by the financial institution with whom the contract or arrangement was entered into, decide the amount to be paid out of the life income fund in that year;

  • (c) provides that in the event that the holder of the life income fund does not notify the financial institution with whom the contract or arrangement for the life income fund was entered into of the amount to be paid out of the life income fund in a calendar year, the minimum amount determined in accordance with the Income Tax Act shall be paid out of the life income fund in that year;

  • (d) provides that for any calendar year before the calendar year in which the holder of the life income fund reaches 90 years of age, the amount of income paid out of the life income fund shall not exceed the amount determined by the formula

    C/F

    where

    C

    is the balance in the holder’s account

    • (a) at the beginning of the calendar year, or

    • (b) if the balance at the beginning of the calendar year is zero, on the day on which the election was made; and

    F

    is the value, as at the beginning of the calendar year, of an annual $1 payment, payable on January 1 of each year between the beginning of that calendar year and December 31 of the year in which the holder reaches 90 years of age, established using an interest rate that is

    • (a) for each of the first 15 years, not more than the monthly average yield on Government of Canada marketable bonds of maturity over 10 years, as published by the Bank of Canada, for the month of November before the beginning of each calendar year, and

    • (b) for any subsequent year, not more than 6%;

  • (e) provides that, for the calendar year in which the contract or arrangement was entered into, the amount determined under paragraph (d) shall be multiplied by the number of months remaining in that year and then divided by 12, with any part of an incomplete month counting as one month;

  • (f) provides that if on the day on which the life income fund was established part of the life income fund was composed of funds that had been held in another life income fund of the holder earlier in the calendar year in which the fund was established, the amount determined under paragraph (d) is deemed to be zero in respect of that part of the life income fund for that calendar year;

  • (g) provides that the funds in the life income fund may only be

    • (i) transferred to another life income fund or to a restricted life income fund,

    • (ii) transferred to a locked-in RRSP, or

    • (iii) used to purchase an immediate life annuity or a deferred life annuity;

  • (h) provides that, on the death of the holder of the life income fund, the funds shall be paid to the holder’s survivor by

    • (i) transferring the funds to another life income fund or to a restricted life income fund,

    • (ii) transferring the funds to a locked-in RRSP, or

    • (iii) using the funds to purchase an immediate life annuity or a deferred life annuity;

  • (i) provides that, subject to subsection 53(3) of the Act, the funds or any interest or right in those funds, shall not be transferred, charged, attached, anticipated or given as security and that any transaction appearing to do so is void or, in Quebec, null;

  • (j) provides that, in the calendar year in which the holder of the life income fund reaches 55 years of age or in any subsequent calendar year, the funds may be paid to the holder in a lump sum if the holder

    • (i) certifies that the total value of all assets in all locked-in RRSPs, life income funds, restricted locked-in savings plans and restricted life income funds that were created as a result of the transfer, a transfer under the Pension Benefits Standards Act, 1985 or a transfer from another PRPP is not more than 50% of the Year’s Maximum Pensionable Earnings, and

    • (ii) obtains the consent of their spouse or common law partner, if any, and completes and gives a copy of Form 2 and Form 3 of the schedule to the financial institution with whom the contract or arrangement for the life income fund was entered into;

  • (k) provides that the holder of the life income fund may withdraw an amount from that fund up to the lesser of the amount determined by the formula set out in subsection 38(2) and 50% of the Year’s Maximum Pensionable Earnings minus any amount withdrawn in the calendar year under this paragraph or under paragraph 38(1)(e), 39(1)(f) or 40(1)(k)

    • (i) if the holder certifies that they have not made a withdrawal in the calendar year under this paragraph or paragraph 38(1)(e), 39(1)(f) or 40(1)(k) other than within the last 30 days before the day on which the certification is made,

    • (ii) if,

      • (A) in the event that the value determined for M in subsection 38(2) is greater than zero,

        • (I) the holder certifies that they expect to make expenditures on a medical or disability-related treatment or adaptive technology during the calendar year in excess of 20% of the holder’s expected income for that calendar year determined in accordance with the Income Tax Act, other than any amount withdrawn in the calendar year under this paragraph or paragraph 38(1)(e), 39(1)(f) or 40(1)(k), and

        • (II) a physician certifies that the medical or disability-related treatment or adaptive technology is required, or

      • (B) the holder’s expected income for the calendar year determined in accordance with the Income Tax Act –– other than any amount withdrawn under this paragraph or paragraph 38(1)(e), 39(1)(f) or 40(1)(k) within the last 30 days before the day on which the certification is made — is less than 75% of the Year’s Maximum Pensionable Earnings, and

    • (iii) if the holder obtains the consent of their spouse or common law partner, if any, and completes and gives a copy of Form 1 and Form 2 of the schedule to the financial institution with whom the contract or arrangement for the life income fund was entered into; and

  • (l) provides that the holder of the life income fund who has ceased to be a resident of Canada for at least two years may withdraw any amount from that fund.

• Marginal note:Lump sum

  (2) The life income fund shall provide that the funds may be paid to the holder in a lump sum if a physician certifies that, owing to mental or physical disability, the holder’s life expectancy is likely to be considerably shortened.