LIRA/DCPP partial unlocking upon conversion to LIF account

Based on the jurisdiction of the LIRA or DCPP account, it may be possible to unlock a percentage of the funds upon conversion to a LIF account and transfer the unlocked portion to an RRSP/RRIF account.  In Snap, you can choose the age to convert a LIRA/DCPP to a LIF and also specify a percentage to unlock, and which account to transfer the funds to. 

The first step is to add the LIRA and/or DCPP account to the projections on the Assets page. 

By default, a LIRA/DCPP/LIF account has the following initial settings:

  1. The LIRA to LIF conversion age is the year before the client's retirement age.
  2. The LIRA/DCPP jurisdiction is the province of residence of the client. 

To change these settings and to set up the partial unlocking of the LIRA at the conversion age, select Scenario Setup -> Settings -> Registered Assets.

On the Registered Assets settings page, the initial default settings are displayed as follows. If you see Not Selected under the Jurisdiction, the province of residence will be used to determine the rules such as maximum and minimum withdrawal rates.

Using this table you can adjust the jurisdiction, unlocking percentage, and where to transfer the unlocked funds to. Snap will prevent you from unlocking a higher percentage than is allowed based on the jurisdiction of the account. 

In the above example, at the client's age of 65, the LIRA will be converted to a LIF and 50% of the funds will be transferred to the account RRSP 1. The DCPP will also be unlocked at the same time and the funds will be transferred to RRSP 2. You can choose the same RRSP/RIF account to move unlocked funds to, but for clarity, in this example, we have two RRSP accounts. The year following the unlocking, the LIF withdrawals will be commenced automatically. Minimum or maximum LIF withdrawals can also be enforced, as shown in this article: How to minimize RRIF/LIF withdrawals or maximize LIF withdrawals

Note that you will not be able to unlock the LIRA account and start the LIF income in the same year. The income starts in the year following the LIF conversion and unlocking. Therefore, if you want to unlock a LIRA account in the first year of the projections, you won't be able to take income that same year. Instead of using the unlocking table, set up the projections with a LIF account and RRSP account containing the unlocked balance under the Assets page.  If you enter an age for the LIRA to LIF conversion that occurs before the start year of the projections, Snap will assume the conversion and unlocking have already occurred.

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