Under which of the following circumstances would Nathalie be allowed to withdraw her funds?

Nathalie worked for 25 years as an administrative assistant at a manufacturing company. When she left the company 10 years ago, she transferred the money that she accumulated from the company’s pension plan into a locked-in retirement account (LIRA). Now she is 60 years of age and would like to withdraw the money from the LIRA.

Under which of the following circumstances would Nathalie be allowed to withdraw her funds?

A. She moved to Arizona last year.

B. She is disabled and her life expectancy is reduced.

C. She is retiring.

D. She will start collecting QPP benefits.

View Answer

Answer: B

Explanation:

Locked-In Retirement Accounts (LIRAs) are subject to specific restrictions regarding when and how funds can be accessed. Under LLQP regulations, individuals can generally only withdraw funds from a LIRA before retirement under certain circumstances.

These include:

Disability and a reduced life expectancy, as defined by the plan’s requirements, which allow for early

withdrawal due to significant financial or health hardship​.

In contrast:

Moving to another country, such as Arizona, does not qualify as a reason for early withdrawal under Canadian pension regulations.

Retirement alone, without converting the LIRA into a Life Income Fund (LIF) or similar product, does not directly permit withdrawals from the LIRA.

Collecting QPP benefits does not impact the withdrawal conditions of a LIRA directly unless combined with an allowable reason such as disability with reduced life expectancy.

Thus, option B correctly reflects the LLQP criteria under which Nathalie may access her LIRA funds early due to disability and a shortened life expectancy.