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Nova Scotia Lira Unlocking Rules

On the other hand, the amended regulations for applications requiring a physician to provide medical advice require the physician to be licensed in the province or territory in which the applicant resides (currently, the physician may be licensed in any Canadian province or territory). In particular, this amendment also applies to applications to unlock reduced life expectancy, including those made under pension plans. Financial institutions are advised to refer to sections 211 to 230 of the Regulations when considering applications for exemptions from financial hardship. However, the Department of Finance and Treasury Board have provided a comprehensive guide and checklist to further assist financial institutions in processing applications. The Government of Nova Scotia recently published regulations reassigning the authority to administer cases of financial hardship in the province. Starting at 1. In July 2021, individuals apply directly to their financial institution for permission to withdraw money from a Blocked Retirement Account (« LIRA ») or Life Income Fund (« LIF ») in the event of financial hardship. Small pension benefit unlocked from a pension plan: Different jurisdictions have different rules for releasing LIRAs, except in retirement. Some reasons are common in more than 1 jurisdiction: If a person has a shortened life expectancy (as certified by a physician) due to a physical or mental condition, funds may be withdrawn in cash or transferred to a tax-efficient savings vehicle such as an RRSP or RRIF, which is subject to applicable tax regulations. If a person who has a spouse or civil partner wishes to release funds in financial difficulty, a one-time balance of 50% or a small account, the spouse or civil partner must sign Form 2: Certificate of spouse/life partner confirming that he or she accepts activation (see also questions 2 and 11 of this form). Responsibility for the administration of claims of financial hardship previously rested with the Superintendent of Pensions of Nova Scotia, as set out in section 91 of the Pension Benefits Act, S.N.S. 2011, c.

41 (« the Act ») and specified in the Pension Benefits Regulations, Reg. Nova Scotia 200/2015 (the « Regulations »). However, as a result of Bill 87, the Pension Benefits Act (as amended), passed by the province on April 19, 2021, and recently published amendments to the regulations, this responsibility will effectively be transferred to financial institutions as of July 1, 2021. Note that releasing these funds will lose the creditor protection provided for blocked funds. If someone has a spouse or life partner, their consent is required before funds can be released in case of financial difficulties, one-time 50% or small account balances. The consent of the spouse or partner is given by completing Form 2 of Schedule V to the Pension Benefits Standards Regulations, 1985 (Form 2). Different jurisdictions have different rules for LIRA unlocking There are certain reasons for LIRA unlocking that are common in more than 1 jurisdiction, so the following unlock provisions are available: The unlocking options offered by a locked-in pension plan or pension plan and the conditions that must be met to use them are set out in Article 20, 20.1, 20.2, 20.3 and 28.4 of the Pension Benefits Standards Regulations, 1985 (PBSR). 50% release – Depending on your province or territory, you can unlock up to 50% of your LIRA funds and transfer them to a Registered Retirement Account (RRSP).

Please note that not all unlock options are available from one or every suspended pension plan. The following table provides a high-level description of the unlock options from which they are available and a link to the forms that need to be completed. Some of the release provisions relate to the « Maximum Annual Old Age Pension » (YMPE) to determine whether funds can be released and/or what amounts can be released. The YMPE is a dollar amount that represents the maximum pensionable income under the Canada Pension Plan and changes annually based on a statutory formula. The YMPE for 2020 is $58,700. The change in authority to approve requests for the release of financial hardship will bring Nova Scotia in line with other Canadian jurisdictions that allow for such release. In addition, SMEPP sponsors will now have more flexibility to amend their plans and will benefit from the same transition limit for extended plan funding as other pension plan holders.