The Financial Services Commission of Ontario reports that some of the regulatory changes to the rules governing locked-in accounts have taken effect.

Effective July 27, owners of existing Life Income Funds are no longer required to purchase an annuity by the end of the year in which they reach 80 years of age and may continue their old LIF after age 80.

Also, owners of Locked-In Retirement Accounts may keep the money in their LIRA until the end of the year in which they reach 71 years of age.

Effective Jan. 1, 2008:

  • financial institutions will be able to offer a new LIF that will provide more flexible payments and allow owners a one-time opportunity to withdraw up to 25% of the amount in their new LIF;
  • owners of old LIFs and Locked-In Retirement Income Funds will be able to transfer the money in these accounts to new LIFs;
  • surviving spouses will be allowed to transfer the survivor benefits from a locked-in account directly to an RRSP or an RRIF; and
  • owners of locked-in accounts who are non-residents of Canada for two years may withdraw the money in their account.

After Dec. 31, 2008, old LIFs and LRIFs will no longer be available for purchase.