Amendments related to LIFs as of 2025
Amendments related to life income funds (LIFs) come into force on 1 January 2025. They are summarized here by subject. Some of them are compared with the rules in effect prior to 2025 and evaluated using 2024 data for information purposes.
The regulatory amendments do not apply to locked-in retirement accounts (LIRAs) or voluntary retirement savings plans (VRSPs).
Age of a person applying for a life or temporary income from an LIF
| Before 2025 | As of 1 January 2025 |
|---|
| The age as at 31 December of the year preceding the application for income. | The actual age at the time the application for income is filed. |
Reference rate (prescribed rate)
| Before 2025 | As of 1 January 2025 |
|---|
The reference rate for a year is used to determine the factor provided for in Schedule 0.6 to the Regulation respecting supplemental pension plans  (hereinafter the Regulation), which, based on the person's age, applies to the calculation of the upper limit of the life income. In 2024, the reference rate is 6%. | The prescribed rate for a year is the one that applies to the calculation of the upper limit of the life income. In 2024, the prescribed rate would have been 6.25%. |
Maximum LIF withdrawal calculations for persons under age 55
| Before 2025 | As of 1 January 2025 |
|---|
| Persons under age 54 as at 31 December of the year preceding the application for income | Persons under age 55 at the time the application for income is filed |
|---|
Upper limit of the life income
= (Factor provided for in Schedule 0.6 to the Regulation ) x (LIF balance) – (Maximum temporary income following the filing of an application) / (Factor provided for in Schedule 0.7 to the Regulation ) | Upper limit of the life income
= (Prescribed rate) x (LIF balance) – (Maximum temporary income following the filing of an application) |
In 2024, the upper limit of the life income is equal to the result of the following equation:
[0.061 x (LIF balance) – (Maximum temporary income)/1] | In 2024, the upper limit of the life income would have been equal to the result of the following equation:
[0.0625 x (LIF balance) – (Maximum temporary income)] |
Maximum temporary income
= 40% of the maximum pensionable earnings (MPE) – 75% of the estimated income In 2024, the maximum temporary income can reach $27 400 (= 40% of $68 500). | Maximum temporary income
= 50% of the maximum pensionable earnings (MPE) – 100% of the estimated income In 2024, the maximum temporary income could have reached $34 250 (= 50% of $68 500). |
Temporary income payable per month
= 1/12 of (40% of the MPE – 75% of the estimated income) In 2024, the monthly maximum temporary income payable is $2283. | Temporary income payable per month
= 1/12 of (50% of the MPE – 100% of the estimated income) In 2024, the monthly maximum temporary income payable would have been $2854. |
Maximum LIF withdrawals for persons aged 55 and over
| Before 2025 | As of 1 January 2025 |
|---|
| Persons aged 54 to 64 as at 31 December of the year preceding the application for income | Persons aged 55 or over at the time the application for income was filed |
|---|
There is an adjusted upper limit of the life income to take into account, where applicable, any temporary income. There is a maximum temporary income regardless of employment earnings. | There is no upper limit related to withdrawals. |
| Persons aged 65 or over as at 31 December of the year preceding the application for income |
|---|
There is an upper limit of the life income. It is impossible to withdraw temporary income at that age. |
Amounts transferable from an LIF to an RRSP or RRIF
| Before 2025 | As of 1 January 2025 |
|---|
Each year, a person can transfer a certain amount from his or her life income fund (LIF) to a registered retirement savings plan (RRSP) or to a registered retirement income fund (RRIF). Maximum transferable without an application for temporary income (at any age)
= Upper limit of the life income – Mandatory minimum withdrawal Maximum transferable with an application for temporary income (from ages 54 to 64)
= Minimum [Upper limit of the life income; (Maximum income – Mandatory minimum withdrawal)] | No amount can be directly transferred from an LIF to an RRSP or RRIF. |
Refunds (deletion of exceptions related to LIFs)
As of 1 January 2025, a person can no longer request a refund of a life income fund (LIF) balance in either of the following two situations:
he or she has not lived in Canada for at least 2 years;
he or she is aged 65 or over and the total of the locked-in amounts accrued in the savings vehicles listed below does not exceed 40% of the maximum pensionable earnings (MPE) of the year in which he or she applied for a refund, that is, $27 400 in 2024;
The savings vehicles concerned are:
- locked-in retirement accounts (LIRAs);
- life income funds (LIFs);
- a defined-contribution pension plan or a defined-contribution component of a defined-benefit or target-benefit pension plan;
- a simplified pension plan;
- locked-in registered retirement savings plans (RRSPs);
- voluntary retirement savings plans (VRSPs).
However, a person can transfer his or her LIRA balance to an LIF before 31 December of the year during which he or she turns 71 to obtain an LIRA refund.
Obligation of financial institutions managing LIFs to provide information
Persons who are age 55 in 2025
- Inform the following persons as soon as possible, as of 1 January 2025, of:
- the elimination of the upper limits as soon as they turn 55;
- the impossibility of transferring amounts directly from a life income fund (LIF) to a registered retirement savings plan (RRSP), a registered retirement income fund (RRIF) or a not locked-in voluntary retirement savings plan (VRSP) account.
Persons who are age 55 or over as at 1 January 2025
- Inform the following persons as soon as possible, as of 1 January 2025, of:
- the elimination of the upper limits;
- the impossibility of transferring amounts directly from an LIF to an RRSP, an RRIF or a not locked-in VRSP account.
- Indicate on the persons' statements the following:
- the estimated amount of the life income (the amount is provided for information purposes because it has no impact on the amount that can be withdrawn);
- the method used to establish the estimate;
- the fact that the estimated amount of the life income may vary because of withdrawals made and returns on the life income fund (LIF).
Amendments to contracts by financial institutions
The following contracts must comply with the provisions of the Regulation respecting supplemental pension plans:
- any life income fund (LIF) standard contract registered with Retraite Québec, not later than 1 January 2025;
- any life income fund (LIF) contract entered into with an LIF holder, as soon as possible.
Legal references