A new regulation spells changes to the treatment of locked-in accounts in Ontario.

On June 19, a regulation was made under the Pension Benefits Act that makes numerous changes to the rules governing locked-in accounts — including Locked-In Retirement Accounts, old and new Life Income Funds, and Locked-In Retirement Income Funds.

A notice from the Financial Services Commission of Ontario spells out those key changes, including the availablility of one-time opportunities to withdraw or transfer amounts from these accounts, and the obligations of financial institutions to inform their clients of these opportunities.

According to FSCO, the key changes are:

• from Jan. 1, 2011 to April 30, 2012, owners of Old LIFs and LRIFs will have a one-time opportunity to withdraw in cash or transfer to an RRSP or RRIF up to 50% of the total market value of the assets of the fund;

• from Jan. 1, 2010 to Dec. 31, 2010¸owners of New LIFs will have a one-time opportunity to withdraw in cash or transfer to an RRSP or RRIF an additional 25% of the total market value of the assets of the fund that were transferred into their New LIF account on or before Dec. 31, 2009;

• after Dec. 31, 2009, anyone who purchases a New LIF will have a one-time opportunity to withdraw in cash or transfer to an RRSP or RRIF up to 50% of the total market value of the assets of the fund;

• on or before Sept. 30, 2010, financial institutions are required to give notice of these and other related changes to owners of Old LIFs and LRIFs;

• on or before Jan. 1, 2010, financial institutions are required to give notice of these and other related changes to owners of New LIFs; and

• as of January 1, 2011, all of the rules that govern locked-in retirement accounts (LIRAs) are consolidated into Schedule 3 under the regulation.

IE