RPP Advice - Calgarypuck Forums - The Unofficial Calgary Flames Fan Community

OilKiller · 06-10-2011, 10:45 AM

My wife has a locked in RPP through her work. Since we are moving and she is leaving her work obviously she won't be contributing to it any longer at that place of employment. It's not a large amount, just under $10,000 and we contacted Manulife to see if we could cash it in, and we cannot, as mentioned, it's locked in.

They did say something about converting it to something else and then cashing that in, although they would not be specific. Can anyone offer any advice here? We could really use that money for moving expenses, etc. Is there anything we can do to get that money out quickly? Thanks.

Slava · 06-10-2011, 10:49 AM

Unless she is over 50 years of age its a locked in pension....so you can transfer it to an account of her own for investment purposes but its very difficult to withdraw.

Raekwon · 06-10-2011, 10:55 AM

If her new employer has an RPP they may transfer it to her new plan.

Slava · 06-10-2011, 10:58 AM

Quote:

Originally Posted by fotze

I had the same thing, I believe I was unable to touch it. You have to put it in some sort of LIRA.

LIRA = Locked In Retirement Account. You can access this for 50% of it after age 50 (if its registered in Alberta) and age 55 (if its a federally regulated pension).

Quote:

Originally Posted by Raekwon

If her new employer has an RPP they may transfer it to her new plan.

You can do this....although I have yet to see this done, and can't think of a situation where that would make alot of sense. Maybe if you have some amzing investment that is only available within that RPP of the new employer?

OilKiller · 06-10-2011, 10:58 AM

Thanks guys. Kind of what I figured, but thought I would ask to see if there was some way to get to that money. Really don't agree with these locked-in plans. It's your money, you should be able to withdraw it if you choose. Oh well.

Slava · 06-10-2011, 11:19 AM

^ If you have questions feel free to PM me.

The reason that the restrictions are in place though is to prevent people from saving all of this money for their retirement and then spending it all ahead of time. Its designed to provide income for retirees, and by restricting it that means it will serve its purpose.

Bill Bumface · 06-10-2011, 11:23 AM

Quote:

Originally Posted by Slava

You can do this....although I have yet to see this done, and can't think of a situation where that would make alot of sense. Maybe if you have some amzing investment that is only available within that RPP of the new employer?

At a previous job, after an outsource to somewhere I hated, I only lasted a year, so I had a tiny amount in my RPP, like 1-2K. It had some massive management fee every month, so if I left it there it would be eaten by management fees in a few years. I wanted to transfer it out to my RRSP (I think that's what I did with it). They made me wait one year before I was allowed to transfer it. It was pretty much cut down in half because of the fees. I was pissed off.

Kybosh · 06-10-2011, 11:26 AM

You down with RPP? Yeah, there are fees.

GilmourforLeeman · 06-10-2011, 01:46 PM

Quote:

Originally Posted by Kybosh

You down with RPP? Yeah, there are fees.

hahaha

8sPOT · 06-10-2011, 03:35 PM

Once it's transferred into a LIRA you also take advantage of the 'small balance' rule.If the funds in the account are less than 20% of the YMPE which is $48,300 this year.

So that would be $9,660, it will be close. If the amount is less than $9,660 she can withdraw all of it once it's in a LIRA.

Otherwise she has to be either dying or in real bad financial hardship.

Shazam · 06-10-2011, 04:01 PM

Quote:

Originally Posted by 8sPOT

Once it's transferred into a LIRA you also take advantage of the 'small balance' rule.If the funds in the account are less than 20% of the YMPE which is $48,300 this year.

So that would be $9,660, it will be close. If the amount is less than $9,660 she can withdraw all of it once it's in a LIRA.

Otherwise she has to be either dying or in real bad financial hardship.

Wife is dying and you get her money.

What's the downside?

Slava · 06-10-2011, 04:08 PM

Quote:

Originally Posted by 8sPOT

Once it's transferred into a LIRA you also take advantage of the 'small balance' rule.If the funds in the account are less than 20% of the YMPE which is $48,300 this year.

So that would be $9,660, it will be close. If the amount is less than $9,660 she can withdraw all of it once it's in a LIRA.

Otherwise she has to be either dying or in real bad financial hardship.

Good point, I forgot about that! The irritating thing is that if you are over by even $1 you're out of luck.

MoneyGuy · 06-10-2011, 05:21 PM

Quote:

Originally Posted by OilKiller

Really don't agree with these locked-in plans. It's your money, you should be able to withdraw it if you choose. Oh well.

Those restrictions exist for a reason. Imagine being able to withdraw all of your CPP money. Most people would later cry poverty.

Slava · 06-10-2011, 07:40 PM

Quote:

Originally Posted by fotze

It just seems silly that those restrictions are there for such a small group. Its almost like they are saying "government workers are so dumb, that we are going to prevent them from fataing themself over'. Almost.

Do that for everyone though.

It's way more than just government workers though. I have dealt with people in other sectors with large sums of money in these plans. If you work for decades and have a matching pension they can add up!

OilKiller · 06-10-2011, 08:01 PM

Quote:

Originally Posted by MoneyGuy

Those restrictions exist for a reason. Imagine being able to withdraw all of your CPP money. Most people would later cry poverty.

We're not talking CPP, we are talking an RPP from her work. Two totally different things IMO.

OilKiller · 06-10-2011, 08:02 PM

Quote:

Originally Posted by 8sPOT

Once it's transferred into a LIRA you also take advantage of the 'small balance' rule.If the funds in the account are less than 20% of the YMPE which is $48,300 this year.

So that would be $9,660, it will be close. If the amount is less than $9,660 she can withdraw all of it once it's in a LIRA.

Nope, it's over....it's almost 11k apparently. Damn.

Slava · 06-10-2011, 08:07 PM

Quote:

Originally Posted by OilKiller

Nope, it's over....it's almost 11k apparently. Damn.

Is it all vested? That might be your only hope....

OilKiller · 06-10-2011, 08:59 PM

Vested? Not sure...it's a locked in Manulife RPP. Dunno...wife called Manulife and they said it was locked in.

OK...it says she is 100% vested in the plan on the document.

Shazam · 06-10-2011, 09:02 PM

LIRAs exist as a penance for having your employer provide matching funds.

Slava · 06-10-2011, 09:20 PM

Quote:

Originally Posted by OilKiller

Vested? Not sure...it's a locked in Manulife RPP. Dunno...wife called Manulife and they said it was locked in.

OK...it says she is 100% vested in the plan on the document.

Well the vested just means that it's all hers. So if it wasn't vested yet then if you transferred it to a LIRA you might've been under the limit. Unfortunately though it doesn't sound likely. Good news is that she can invest that and one day it could come in handy!