A retirement savings plan that is established by the transfer of locked-in funds from a Registered Pension Plan (RPP) or another locked-in retirement savings/income plan such as a Locked-in Retirement Savings Plan (LRSP), Locked-in Retirement Account (LIRA), Life Income Fund (LIF) or Locked-in Retirement Income Fund (LRIF).
Similar to an RRSP, a LIRA consists of pension credits transferred from the employer upon departure of the employee. The funds invested in the LIRA are tax-sheltered until used to purchase an annuity or an LIF.
A locked-in retirement account (LIRA) is a special registered retirement savings plan (RRSP) into which the contract holder can transfer the amounts that are in their supplemental pension plan (SPP). The amounts held in this type of contract are "locked in" and cannot be withdrawn until they retire. They can be used only for retirement income. At maturity, a LIRA or a locked-in RRSP may be: converted into a life income fund (LIF) or a locked-in registered retirement income fund (RRIF); or used to purchase a life annuity (paid until death).