Cash payments (refunds) from a simplified pension plan (SIPP)

In some situations, you are entitled to a cash payment (refund). All refunds are subject to income tax. However, income taxes can be deferred if the amounts can be transferred directly to an RRSP or a registered retirement income fund (RRIF). For details, consult the Canada Revenue Agency .

Disability that reduces life expectancy

If a physician certifies that you are disabled due to a physical or mental condition that reduces your life expectancy, you can obtain a lump-sum payment of amounts credited to your locked-in and not locked-in accounts. The refund must be made within 60 days following the date on which you file the application.

Contributions that exceed taxation limits

You will receive a refund of the portion of the contributions credited to your locked-in and not locked-in accounts that exceeds the maximum allowed under taxation rules. Once the financial institution sees that your contributions exceed the maximum, a refund will be made to you. You do not have to make an application. Such refunds are subject to income tax and cannot be transferred directly to an RRSP to defer taxes. For details, consult the Canada Revenue Agency .

Other cases where cash payments can be made

Locked-in account

Account balance less than 20% of the maximum pensionable earnings (MPE), which is 13 700 $ in 2024

You are entitled to a refund of sums credited to your locked-in account if, when your active membership ends, the total amount is less than 20% of the MPE, which is $13 700 in 2024.

Retirement savings less than or equal to 40% of the maximum pensionable earnings (MPE), which is $27 400 in 2024

You are entitled to a refund of the sums credited to your locked-in account if both of the following conditions are met:

• you are under age 65
• the total of the sums credited to your locked-in SIPP account, your defined contribution pension plan, your life income funds and your locked-in retirement accounts is less than or equal to 40% of the MPE for the year in which the refund application is made, which is 27 400 in 2024.

To obtain a refund, complete Schedule 0.2 of the Regulation respecting supplemental pension plans and send it to the financial institution.

Not locked-in account

With a few exceptions, you can receive, at any time, a refund of a part or all of the sums credited to your not locked-in account, even if you are still an active member.

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