Locked-in and not locked-in benefits

Important Notice

Please consult Newsletter number 32, Amendments to the Regulation respecting supplemental pension plans effective 4 January 2018, as well as division V – Transfer of benefits between spouses This link will open in a new window. of the Regulation respecting supplemental pension plans, to find out the rules for partition applicable to spouses in a civil union, the changes to the payment methods applicable to the former spouse, and the calculation of member benefits after partition.

General rule

The sum to be transferred to the former spouse is locked-in, unless:

  • The member's benefits are not locked-in.
  • The sum transferred in capital, with interest, is less than 20% of the maximum pension earnings (MPE) under the Québec Pension Plan for the year in which the application for partition is field. ($12 980 in 2022)
  • The former spouse has not lived in Canada for more than 2 years.

A member's not locked-in benefits

If only a portion of a member's benefits are locked-in, the sum transferred to the former spouse will be not locked-in in the same proportion as for the member.

Example

On the date the motion to institute proceedings is filed, the balance of a member's accounts in a simplified pension plan (SIPP) is as follows:

  • locked-in account: 30 000 $
  • not locked-in account: 20 000 $

Suppose the former spouse is entitled to a sum of 10 000 $. Of that sum, 6 000 $ will be locked-in and 4 000 $ will not.

Non-resident

The criterion for non-residence is that applicable to the member, that is, the non-residence criterion within the meaning of the Civil Code of Québec.

Transfer vehicles

The former spouse must choose to have the sum to which he or she is entitled transferred to one of the following transfer vehicles:

  • an LIRA 
  • an LIF
  • a life annuity
  • his or her own supplemental pension plan, if that plan accepts transfers
  • the member's supplemental pension plan (in an account in the former spouse's name, if the member's plan allows such accounts.

If the sum is not locked-in, the former spouse can choose to have it transferred to an RRSP or receive a cash payment.

Notethat...

If the former spouse fails to inform the administrator of his or her payment option within 60 days of the sending of an application for or notice of partition, as the case may be, the administrator will choose the transfer vehicle and will make the transfer, even in the absence of the form spouse's agreement.

For more information... 

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