The traditional form of pension is the life annuity.
Typically with a life annuity, your locked-in pension money is paid to a life insurance
company. In return, the life insurance company guarantees the payment of a fixed amount of
pension for your lifetime.
You have the option of opening a prescribed
RRIF if your pension money is in a locked-in retirement account (LIRA), which you may
know better as a locked-in RRSP, or if you have an existing Life Income Fund (LIF) or
Locked-In Retirement Income Fund (LRIF) contract. If you are a pension plan member and you
wish to transfer money directly from a pension plan to a prescribed RRIF at retirement,
your plan must permit you to do so.
You cannot transfer money to a prescribed RRIF prior to
attaining age 55 unless the pension plan from where the money originated provides that
your pension may commence at an earlier age.
Pension legislation requires that your spouse sign a
consent form before money can be transferred to a prescribed RRIF because you may withdraw
the entire amount in your prescribed RRIF at any time.
The
Pension Benefits Regulations, 1993 (Regulations) were recently amended
to permit, but not
require, defined contribution pension plans to offer a Variable
Benefit to members and former members who are eligible to retire.
A Variable Benefit, which is similar in nature to a prescribed
RRIF, will provide members or former members with an additional
alternative at retirement for receiving pension income directly
from their plan.
Pension legislation requires that your
spouse sign a consent form and a waiver form before money can be
transferred to a Variable Benefit Account because you may withdraw
the entire amount in your account at any time.
Individuals interested in a prescribed
RRIF or a Variable Benefit should seek the assistance of a
professional financial advisor.
Note: This publication has been developed as a general
guide. It has no legal authority and should not be construed as legal advice. Sections 29, 29.1
and 29.2 of The Pension Benefits Regulations, 1993 (Saskatchewan) prescribe the
rules for a LIRA, a RRIF and a Variable Benefit, respectively. Nothing in this publication supersedes or
replaces those regulations.
