what is a locked in retirement account lira 
a locked in retirement account lira is a type of registered pension account in canada that does not permit withdrawals before retirement except in exceptional circumstances locked in retirement accounts are designed to hold pension funds for former employer sponsored plan participants and certain others until they reach retirement age understanding locked in retirement accounts liras an lira is a tax deferred retirement account used to shelter money transferred in from an employer sponsored pension plan much like a 401 k to individual retirement account ira rollover in the united states an lira can only be funded in that way and you cannot make additional contributions to it transferring money from an employer pension into an lira is allowed only under certain circumstances for example the beneficiary may have left the employer the pension funds may have been divided up with a former spouse as a result of a divorce settlement or the beneficiary may have died leaving the money in their pension to an heir cash withdrawals are not permitted while the funds are locked in although the account may be unlocked under certain emergency circumstances pension funds that are transferred to an lira can later be used to purchase a life annuity or can be transferred to a life income fund lif or a locked in retirement income fund lrif or some combination of those once the account s beneficiary reaches retirement age the life annuity lif or lrif will provide them with a pension for life a registered retirement savings plan rrsp except for the locked in kind can be cashed in at the owner s discretion an lira does not have such an option if the employer pension plan is under federal rather than provincial jurisdiction then the participant s money would be transferred into a locked in registered retirement savings plan also known as a locked in rrsp rather than an lira the two are very similar in the way they work government requirements for liraslira plans are governed by provincial pension laws every locked in pension must comply with the laws of a specific province according to the qu bec government website for example depending on the province in which the plan owner lives there can be different rules on how to unlock locked in pension funds the allowable reasons for unlocking an lira may include low income potential foreclosure eviction from a rental first month s rent and security deposit high medical or disability costs shortened life expectancy and permanent departure from canada unlocking 50 of an lira can be done one time if you are 55 or older in some provinces small balance unlocking is allowed if the balance is under a certain amount if you need to take money from an lira before it would normally be allowed it s best to consult a financial advisor who knows the rules that apply in your province especially if the amount involved is substantial 