Unlocking pension funds due to financial hardship
I recently came across someone who was financially impacted by the recent economic downturn. Although they were not over the age of 50, they were desperate to access their Locked in Retirement Account (LIRA).
With a little research I found this information right off the government of Alberta Website.
If you are facing a situation of financial hardship, you may apply to the Superintendent of Pensions, no more than twice in a twelve-month period, for a release of some or all of the funds in your LIRA or LIF.
There are a number of situations of financial hardship:
- You or your pension partner risk eviction from your principal residence due to overdue rent, or you have received notice that if payment is not made, the Sheriff will seize your property to reimburse your landlord for rent arrears.
- You or your pension partner risk foreclosure of a mortgage on your principal residence due to a debt secured against that residence.
- You or your pension partner require first and last month’s rent (or security deposit) on a principal residence.
- You, your pension partner or dependent face medical expenses that are not covered by any insurance, and a physician certifies that the treatment, medication or medical aid is reasonable to treat the illness or disability.
- You require alterations to your primary residence to adapt to your disability, or your pension partner’s or your dependent’s disability.
- Your estimated income for the next 12 months is less than two thirds of the Year’s Maximum Pensionable Earnings (YMPE). (For the year 2010, your expected income is less than $31,467.)
- Canada Revenue Agency (CRA) has started legal proceedings against you to pay overdue personal income taxes.
- You are a registered debtor under the Maintenance Enforcement Act of Alberta and child maintenance payments are in arrears.
- You find yourself in a situation of financial difficulty that does not fall under the above categories, but that the Superintendent considers would reasonably qualify as financial hardship.
You do not have to provide information about your other assets or prove you have no other assets to qualify for a financial hardship withdrawal,
however, certain documents, specific to each circumstance outlined on the previous page, must be included with the application form.
- A copy of the eviction notice / distress for rent document. If you live in Alberta, written confirmation from the Homelessness and Eviction Prevention Fund, denying your request for funding through that program.
- A copy of the foreclosure notice.
- A copy of the lease/tenancy agreement, including the monthly rental cost (and/or the security deposit) of the rental unit, and a letter from the Homelessness and Eviction Prevention Fund, confirming that your request for funding through that program was denied.
- A copy of the invoice or estimate for medical treatment or medication, and a physician’s written opinion that the treatment is reasonable for the patient.
- A copy of the cost estimate to alter the primary residence; a copy of a physician’s opinion that the you, your pension partner or dependant has a disability; and a written confirmation that the alterations are not covered by public health care, private insurance or other Government programs.
- Completion of the Statement of Expected Income section of the application.
- A copy of the Writ of Seizure or Requirement to Pay (RTP), issued by Canada Revenue Agency with respect to your personal income tax arrears.
- A copy of the Maintenance Enforcement Order or statement of arrears from the Alberta Maintenance Enforcement Program.
- Your written explanation detailing the specific hardship and the costs that you face, including copies of invoices, statements, or other documents as proof of the financial hardship.
Along with your completed application, you must also include a copy of the most recent statement of your locked-in account. There is no charge to make an application. If your application is successful, you will receive written consent from the Superintendent of Pensions to a release of funds from your LIRA or LIF due to financial hardship. This consent must be presented to your financial institution holding your locked-in funds in order to have the monies released.
Pension Release is a flexible alternative to purchasing an annuity. If you are 55 years of age or over and have a suitable amount in your pension fund then you can release a tax–free cash lump sum of up to 25% of that pension without having to retire or take an income.
how much time take to debit those amount in a/c after choosing this option of 55 years unlock pension
How do I do the “pension release”? Very interested!!
Depending on the company you worked for in earning the pension, the provincial boards may not be the right ones to unlock the LIRA. I just went through a month long back-and-forth with the Alberta Government before learning this.
If the company you worked for is federally regulated, you have to fill out three forms from http://www.osfi.gc.ca. Rather than sending these to the government, once you fill these out, you get them signed by a notary public, commissioner of oaths, or one of those types, and deal directly with the bank holding the funds.
After going through that process, however, I am now looking for extraordinary means of accessing the account as nothing short of a last resort. No deal for me.
Hi, i worked and have a vested bc pension of 77000 it was transferred to BMO into a LIF ? that is not accessible. I am in desperate financial hardship. BC has a new act to request funds under hardship but the regulations are not yet written so I can not make a request i will qualify, my bank knows everyone knows but I am unable to get help. Does anyone know were I am able to get help. I already applied to bc welfare and i am barely living on the 590 dollars i get..
Hi just wondering if you were able to access your funds after filling out the 3 forms? Thanks
I can’t understand why I can’t get acress to my money I live in Newfoundland the investment that I have is a locked in pension the company I worked with closed the store near me and I had no choice back then and the bank tells me I have to be 55 before I can touch it I don’t think this is right can you tell me where to get acess to it
Unfortunately your bank is correct. If the pension legislation is Newfoundland then there is no way to access the funds prior to turning 55 years old…
Hello I currently have an omers pension in Ontario I’m 54 and dealing with major financial issues. However I do earn over 45 thousand per year but I’m in serious debt. Loans car payments rent ect .
Can I withdraw any to help me out.
Hi Jeff Bush here I reside in Hamilton On. I have a situation. This started when My Employer of 33 years dissolved my position and moved the jobs to the States. please note never been unemployed. They gave me a settlement which disqualified me from EI til Sept 09,2012, that’s 1 1/2 years. I have not been able to get a job in my residing area in my field of compressor manufacturing and repair.
Their was a window at 55 that i was eligible to get my pension. I decided to take my pension from the company since I was 55 and had to act to get income in the future. I had to rent part of my house out and survive on my pension of 321.00 a month.
I would like some advise on how to get some of my pension money to survive quickly.
We can go into further detail because their is more to tell serious reply’s please
Great article, thanks. I have a LIRA account and tried to withdraw some funds due to serious hardship. I live in Montreal but my LIRA pension under Federal Jurisdiction/registration (my LIRA was from my previous employee Bank). Was told cannot withdraw funds due to hardship, only if income lower than 20k/yr apprx.
Is this true, is there any way I can withdraw money due to hardship? Your help would be greatly appreciated.
If your LIRA is under Federal jurisdiction you can convert it to a LIF (Life Income Fund) at any age and access some of the money. The amount you can redeem is a percentage of the balance of the plan on Jan 1. Here is a link the OSFI maximum payment table. It may not be much but you can get something: http://www.osfi-bsif.gc.ca/Eng/pp-rr/faq/Pages/lif-frv.aspx
Source: Financial Planner.
Did you leave your pension with the company (i.e. now taking a monthly pension) or move to a LIRA at a financial institution? If you moved it to a bank what is the legislation of the LIRA? How old are you? I may be late to answering this question but if still need help let me know.
I really need some advice of who can help me access my funds. I am in a time of need and would give a percentage to someone who knows jow to get me my funds.
The options 8 and 9 are no longer on the updated application. Or maybe I am wrong. I am dealing with personal Financial Hardship. I need access to some of the funds. Is there others ways.
It’s unfortunate that though we live in AB, the legislation that applies to our LIRA is SK as that is where the pension originated. SK makes it really difficult to access those funds. No financial hardship stipulation at all….
Is there an updated application for option number nine. I looked up applications and they only go up to option 8
My funds are locked in also from great west life I have a terminated pension plan with a total of $15,480.00
I received the options package with no option of cashing out what can I do?
Hi there. I live and work in BC and I am under very serious financial hardship. I have demand letters from my bank, and 10 days before all my debts go to legal. I am at risk of losing my primary residence via a foreclose on my mortgage. I’ve tried to work with my bank but the FMEP is taking 40% of my pay because I’m in arrears so I can’t make my payments.
Is there any way I can access a portion or enough of my 80,000 dollar RRSP to get me back on track?
I’m at risk of losing everything and I’m a stressed out wreck….
You are the best. I am sooo happy I found you as I didn’t know what to do with a DCP at retirement.
I live in Saskatchewan and do not know the government laws here for unlocking a LIRA. I have can’t understand why a person is not able to access the money that is rightfully theirs.
I am going to fill out the forms and see what response I get.
How long after aplying for hardship to take out some of your pension. If you get approved do you get the money is it a long process
Any response to this question I’m wondering the same
I hope you can answer me a question. I live in Manitoba and in April I cashed in 50% of my LIRA. To do so the financial institution I’m dealing with put the other 50% into a LIF. The LIF is worth little over $10,000. I was asked at the time to fill out a form so I could draw from the LIF starting in 2016 up to $700 a year to age 90.
I’m not working and cannot find work and my RRSPs will not be enough to last me till I’m 65. However if I could access to the whole amount in my LIF, that together with my RRSP can probably get me by till I can collect my normal pension. Is it true that under Manitoba law I can access to the remainder amount left in my LIF and withdraw it all if it’s less than $13,000 and not have to get small payments out of it till I’m 90 which probably will end up to my estate anyhow?
i live in saskatchewan and want to know is there any way possible for me to take out some of my pension.. plz explain if i can and if not why
I have 115 000 in a LIRA in Alberta.I need to pay off 30000 worth of credit card debt as I am not making enough to meet my day in ,day out bills.I am 48 years old.Is there anyway to access this money?
You make note in point 7 “Canada Revenue Agency (CRA) has started legal proceedings against you to pay overdue personal income taxes.” I live in Ontario and I am looking for this relief. I cannot find this on the Financial Services Commission of Ontario. Is this a valid reason in Ontario that is hidden, or am I out of luck?
I live in BC and left my job with a locked in pension of $38,000 I desperately need access to. I have a medical condition which has disabled me from working for the past year, still need medical help and is a medical condition disabling so I can not work at this time in my life due to physical chronic pain and not finding the medical help that I need. This, I am deep financial hardship as well and risk being evicted by my landlord and can’t afford to love live on l $610 a month, as I am also in debt over $15,000 with my bank and unable to make payments. I also earned less than $20,000 last year in 2016. Is there any way I can receive access to my pension or at least $20,000 of it? Please help. I am desperate to get well and cannot afford to do so at this time.
Since my husband is my pension partner and refuses to sign the forms for the government I am unable to access my lira. I have not worked in three years. Last year I went back to college to get the transfer credits to pursue a degree. I was accepted into the University of my choice but my husband does not want me to get a higher education than him. I want a divorce but have to go to legal aid even though I have the money to get a lawyer on my own but I can’t access it. Is there any way around this?
Hi Craig, I live in Fredericton NB. I have a measly $5700 in my pension. I currently am not working and this would help my situation. Can I do anything to get access?
this may not seem like a byg deal but i unlocked funds through financial hardship dental and funds were sent directly to dentist instead of transfer tomy other account as usual. that money is not owed to dentist yet and offended that MY money wasnt paid to me first. i actualy believe that my bank had no right to do so. am i right? in alberta
Hi Jim, If I am in default of my child support payments and also in financial hardship, if my LIRA is released, do the funds go to MEP or to help me survive?
Hello I was working for CN on the road away from home I had to quit due to depression reasons and now I’m struggling with all my payments that I can not afford with a full time job at home I am in need to take my pension out but I am not sure we’re to start I am being prescribed medication due to my depression.
I work for an airline so I guess that makes me federally regulated our Pension is with Manulife, I am a single Dad I have 2 boys in college and I need some funds to keep things afloat right now. I’ll be 55 in February can you explain to me what the process is to apply to remove some funds from my Pension ? What’s the taxation rate on funds removed to cash ?
Hello. Needing help, I am living in Newfoundland I worked in Alberta for 8 years for Aecon mining paying Union dues and they pulled out of the mining leaving me without a job. I am 59 years old and now getting a monthly pension of 250 a month until I die. My wife is unable to work due to a illness leaving me to pay all the bill I am working at this time but can’t make ends meet no insurance for medication or dental the last 2 years have been really tough I have ran up my credit cards to 20000 just barely able to make min payments plus everything else. Wondering if there is any way to access my pension funds. Need your help