No one has the authority to grant an exception to the
locking-in rules regardless of the circumstances. The only two exceptions to the
locking-in rules are:
- A pension plan may provide for the payment of a pension over a fixed
term or as a lump sum if you have a considerably shortened life expectancy. Your condition must be
certified by a duly qualified medical practitioner who has been approved by the plan
administrator. Your administrator is responsible for
applying this provision.
- A pension plan may make a payment in lieu of a pension if your
pension is considered to be too small to administer on a practical basis. Your pension is
too small if:
- the commuted value, a lump sum payable today equal to a
future series of payments, of your pension under a defined
benefit provision or the total value of your defined
contribution account does not exceed
20% of the Year’s Maximum Pensionable Earnings (YMPE); or
- your annual pension does not exceed
4% of the YMPE.
- A LIRA may also provide for the
payment of a pension over a fixed term or as a lump sum if you
have considerably shortened life expectancy. Your
condition must be certified by a duly qualified medical
practitioner.
- A LIRA may provide for a lump
sum payment if the total value of your locked-in money is too
small to warrant being administered as a pension. Your
pension is too small if the total amount of all your locked-in
money from all sources does not exceed 20% of the Year’s Maximum Pensionable Earnings (YMPE).
The YMPE is the maximum amount of annual earnings from
employment on which Canada Pension Plan contributions (deductions) and benefits are
calculated. The federal government adjusts the YMPE every year according to a formula
based on average wage levels in Canada.
Please refer to our bulletin
Unlocking Pension Money for further details.
