Transferring to a LIRA
Currently, if you have two or more years of pensionable service in the Public Service Pension Plan
(PSPP), you are vested in the Plan. This means that if you terminate before being eligible to receive a
pension, you have the right to a benefit that represents the amount of money that must be set aside today,
based on current interest rates, to provide pension payments at a future date. This is called the commuted
value and a portion may be required to be transferred to a Locked in Retirement Account (LIRA).
What is a LIRA?
A LIRA is a special type of RRSP designed specifically to hold locked-in pension funds. A financial
institution must apply to the Alberta Superintendent of Pensions for an RRSP to be approved as a LIRA
contract. The LIRA contract must meet certain criteria set out in the Alberta Employment Pension Plans
Employment Pensions. The list is also available through:
Our administrator, Alberta Pensions Services Corporation (APS), can only transfer locked-in funds to a
financial institution that appears on the Superintendent’s list. As well, APS will only send the locked-in
funds directly to the approved financial institution and not to a third party company (such as an
investment broker or related company of the financial institution). You will need to establish a LIRA
with a financial institution so the commuted value payable to you can be transferred. Your financial
institution will be able to assist you with this.
There is no tax withheld from a transfer to a LIRA. Funds in a LIRA may not be paid out in cash. All
funds transferred to a LIRA and the related investment earnings on those funds must be used to purchase
an annuity, Life Income Fund (LIF) or Locked-in Retirement Income Fund (LRIF) that will provide
monthly payments from pension commencement to the death of the LIRA holder.
The earliest a LIRA may be converted to an annuity, LIF or LRIF is the date the LIRA holder reaches age
50. In all cases, the LIRA must be converted before the end of the year in which the holder reaches age
Special Circumstances required to Un-lock a LIRA
contract so allows, where, due to a disability or terminal illness, the holder’s life is likely to be
significantly shortened, as certified by a physician. If the LIRA holder has a pension partner, the pension
partner must sign a waiver prescribed by the EPPA to permit the commutation payment.
A LIRA holder may also apply for a lump sum payment equal to the value of the LIRA contract, if the
contract so allows, where, for the purposes of the Income Tax Act, the LIRA holder has become a non-
resident. If the LIRA holder has a pension partner, the pension partner must sign a waiver prescribed by
Pension Partner Requirements
If the LIRA holder has a pension partner when monthly payments begin, the LIRA must comply with
pension partner protection provisions. In the event the holder dies before the pension partner, the pension
partner will continue to receive monthly payments equal to at least 60% of the benefit payable to holder.
This is payable for the pension partner’s lifetime.
The pension partner may waive the 60% entitlement by completing a waiver form outlined in the
Employment Pension Plans Regulation (Alberta).
Once pension funds have been transferred to a LIRA, the definition of pension partner used by the
pension plan from which the funds were transferred no longer applies. The definition of a pension partner
which applies to LIRAs is the definition in the Employment Pension Plans Regulation (Alberta).
Death before Retirement
If the LIRA holder dies before converting the LIRA to a monthly payment plan, and he or she has a
pension partner at the time of death, the LIRA funds must be transferred to a LIRA in the pension
If the LIRA holder dies before converting the LIRA to a monthly payment plan and there is no pension
partner at the time of death, the cash value of the LIRA will be paid to a beneficiary or to the estate.
Security of LIRA Funds
LIRA funds cannot be attached or seized by a creditor, nor may they be used as collateral.
The financial institution offering the LIRA will be liable to provide a non-commutable lifetime annuity if
the locked-in funds are incorrectly released or transferred.
Alberta Pensions Services Corporation (APS) proudly serves PSPP and provides responsive and focused member
service on behalf of the Plan. If you need more information, please contact APS through the Member Services
PSPP c/o APS
5103 Windermere Blvd. SW
Edmonton, Alberta T6W 0S9
Telephone: 1-877-453-1PSP (1777)