Income from a simplified pension plan (SIPP)
An
SIPP does not pay a pension. To receive income, the amounts credited to the locked-in and not locked-in accounts must be transferred to qualifying transfer instruments.
With a locked-in account
The member can, either directly or following a transfer from the locked-in account to a locked-in retirement account (LIRA):
- purchase a life annuity
- transfer sums to a life income fund (LIF)
- purchase a life annuity with a portion of the sums and transfer the remainder to an
LIF
With the not locked-in account
The member can, directly or following a transfer from the not locked-in account to a registered retirement savings plan (RRSP):
- transfer the sums to a registered retirement income fund (RRIF)
The member can also make a cash withdrawal of all or some of the funds credited to the not locked-in account.
Evaluating member's income
The member's income will depend, among other factors, on:
- the contributions made to his or her accounts
- the investment income earned on the funds in the accounts
- interest rates when the member retires
Transfer is required
When the member's active plan membership ends, at retirement or for any other reason, the member
cannot leave accumulated benefits in the plan. They
must be
transferred.
Other useful information