Locked-in Retirement Account (LIRA), Locked-in Retirement Savings Plan (LRSP), and Restricted Locked-in Savings Plan (RLSP) are locked-in versions of a Registered Retirement Savings Plan (RRSP) to which no contributions can be made.
Life Income Fund (LIF), Locked-in Retirement Income Fund (LRIF), Prescribed Retirement Income Fund (PRIF) and Restricted Life Income Fund (RLIF) are locked-in versions of RRIFs. No contributions can be made and withdrawals are subject to annual minimums and maximums.
At retirement, holders must convert their LIRAs/LRSPs into Life Income Funds (LIF) or Locked-In Retirement Income Funds (LRIF) which will provide pension income during retirement. Instead of converting to a LIF or LRIF, holders may opt to use the proceeds of their LIRA/LRSP to purchase a life annuity from an insurance company. The provision that used to exist mandating the changes from LIF/LRIF/RLIF to Annuities is no longer in force for most legislations.
Under Saskatchewan legislation, LIF and LRIF are not permitted. LIRA are now transferred to Prescribed Retirement Income Funds (PRIF). Manitoba also offers a PRIF alternative.
LIRAs/LRSPs are registered either federally or provincially at the time of transfer from the company pension plan to the LIRA/LRSP. Though some accounts are registered federally, the bulk of locked-in accounts are registered under the legislation of a specific province. The primary differences which exist from province to province involve the minimum age required for withdrawal (i.e. when conversion to LIFs and LRIFs is possible) and the special provisions by which locked-in funds may be unlocked early.
LIRAs and LRSPs are essentially identical in structure.
LIRA refers to a provincial Locked-in Retirement Account, while LRSP refers to a federal Locked-in Retirement Savings Plan (RSP). The two accounts serve identical purposes.