Transitional Information for Transfers to New Life Income Funds (LIFs) between December 2009 and January 2010

These FAQs address some of the questions that arose from transactions in late 2009 and early 2010 as a result of the changes that came into effect on January 1, 2010.

 

Q1. I want to transfer money to a New LIF and then apply to withdraw or transfer a percentage of the funds in my New LIF.  What determines whether I can apply for 25 or 50 per cent?

 

A1. The key date is the date the money was transferred into your New LIF.   If money was transferred into your New LIF before January 1, 2010, you had 60 days from the date of the transfer to apply to withdraw or transfer up to 25 per cent of the funds that were transferred into the New LIF.  Once the 60 day period expired, you could not apply for that original 25 per cent withdrawal or transfer.  However, you can still apply to withdraw up to an additional 25 per cent of the funds in your New LIF.  To apply, you need to complete FSCO pension Form 5.1.1 and submit it to the financial institution that holds your New LIF no later than December 31, 2010.

 

If money was transferred into your New LIF after December 31, 2009, you can apply to withdraw or transfer up to 50 per cent of the funds that were transferred into the New LIF.  To apply, you need to complete FSCO pension Form 5.2 and submit it to the financial institution that holds your New LIF within 60 days of the date the money was transferred into your New LIF.

If you are not sure of the date that your money was transferred into your New LIF, check with your financial institution. - 05/10 

 

 

Q2. I transferred $50,000 into a New LIF on December 20, 2009. I applied for and obtained a withdrawal of 25 per cent of the funds ($12,500) on December 22, 2009.  In 2010, what application can I make and for how much?

 

A2. You can apply to withdraw or transfer up to an additional 25 per cent of the total amount that was transferred into your New LIF prior to January 1, 2010. Therefore, you may apply to withdraw or transfer $12,500 (25 per cent of $50,000). Any increase in the value of the New LIF is not taken into account for the purpose of this application.

 

To apply, you need to complete FSCO pension Form 5.1.1 and submit it to the financial institution that holds your New LIF no later than December 31, 2010.  - 05/10 

 

 

Q3. I transferred $50,000 into a New LIF on December 20, 2009. I did not apply for a withdrawal or transfer by the end of 2009.  In 2010, what applications can I make and for how much?

 

A3. Since the money was transferred into your New LIF prior to January 1, 2010, you had the opportunity to make two separate applications.

 

For the first 25 per cent, you could have applied to withdraw or transfer up to 25 per cent of the money that was transferred into your New LIF on December 20, 2009.  However, since the 60 day application period expired on February 18, 2010, you can no longer apply for the first 25 per cent withdrawal or transfer.

 

You can still apply to withdraw or transfer up to an additional 25 per cent of the money that was transferred into your New LIF on December 20, 2009.  This 25 per cent is based on the amount that was transferred into your New LIF prior to January 1, 2010 ($50,000 x 25 per cent = $12,500). Any increase in the value of the New LIF is not taken into account for the purposes of this application. To apply, you need to complete FSCO pension Form 5.1.1 and submit it to the financial institution that holds your New LIF no later than December 31, 2010.  - 05/10

 

 

Q4. I arranged to open a New LIF in December 2009 and $50,000 was transferred into it on January 5, 2010. I want to apply for a withdrawal or transfer in 2010.  What application can I make and for how much?

 

A4. You can apply to withdraw or transfer up to 50 per cent of the amount that was transferred into your New LIF on January 5, 2010. Therefore, you may apply to withdraw or transfer $25,000 (50 per cent of $50,000). Any increase in the value of the New LIF is not taken into account for the purpose of this application.  To apply, you need to complete FSCO pension Form 5.2 and submit it to the financial institution that holds your New LIF within 60 days of the date the money was transferred into your New LIF (no later than 60 days from January 5, 2010).  Once the 60 day period expires, you cannot apply to withdraw or transfer any money from your New LIF. - 05/10  

 

 

Q5. I transferred $100,000 into a New LIF with Company A in March 2008 and withdrew 25 per cent of the money ($25,000) on April 1, 2008. From April 1, 2008 to September 1, 2009, the New LIF increased in value to $80,000. On September 1, 2009, I transferred all the funds in the New LIF with Company A ($80,000) to another New LIF with Company B. Starting in January 2010, can I apply for an additional 25 per cent withdrawal or transfer from the New LIF with Company B? Which form should I use, what is the deadline for my application, and what amount is the 25 per cent based on?

 

A5. You may apply to withdraw or transfer up to an additional 25 per cent from the New LIF with Company B. The 25 per cent is based on the total amount that was transferred into the New LIF with Company B before 2010, and includes any amount that was transferred from another New LIF. In this example, the total amount that was transferred into the New LIF with Company B before January 1, 2010 was $80,000.  Therefore, you can withdraw or transfer up to $20,000 (25 per cent of $80,000).  To apply, you need to complete FSCO pension Form 5.1.1 and submit it to the financial institution that holds your New LIF no later than December 31, 2010.   - 05/10 

 

 

Q6. I transferred $40,000 into a New LIF with Company A in July 2009 and withdrew $10,000 (25 per cent of the money) in September 2009. In January 2010, I transferred $30,000 (the remaining money in the New LIF) to a different New LIF with Company B. In 2010, can I apply to withdraw or transfer an additional 25 per cent from the New LIF with Company B?

 

A6. No. The amount you can withdraw or transfer is based on the total of all amounts that were transferred into the New LIF with Company B before 2010. Since you did not transfer any money into the New LIF with Company B before January 1, 2010, you cannot withdraw or transfer an additional 25 per cent of the funds.  If you wanted to withdraw or transfer an additional 25 per cent, you should have applied for a withdrawal or transfer from the New LIF with Company A before the money was transferred to the New LIF with Company B.   -05/10 

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