Personal Finance

LIRA unlocking in BC-PLEASE HELP!

  • Last Updated:
  • Aug 9th, 2018 2:13 pm
[OP]
Newbie
Aug 8, 2018
2 posts

LIRA unlocking in BC-PLEASE HELP!

Hey guys, I have a serious issue so if anyone could give me any kind of advice, I'd love to hear them.
In April, I left the retail grocery company I was working for 12 years
(I turned 29 this month) because I was going back to school
So someone from work suggested that I get the lump sum of pension I accumulated while working and
I called the union, applied and I am still waiting. But today I called to ask the status of my request
they told me about LIRA (its the same term in different wording for RRSP I assume) and that I won't be able to
withdraw the money like I wanted to. Like I mentioned, I'm back in school full time, without a job(my program literally
doesn't give you any time for that. It's very heavy) plus a huge credit card bills (please don't judge)
and student loans on my shoulders. I'M IN DEEP TROUBLE.
I don't have a estimate of how much my LIRA will be (waited for 4 months and still waiting, its so frustrating
I'm sure its over 20 000 at least. Well thats what the lady I was speaking to has said)
but would it be possible for me to withdraw the whole thing at once? I did some googling but
I'm still confused on how it works. I'm with TD and I also have a hugh credit card bill with them as well
that I wanted to pay off with LIRA. Would they allow this? Since it's not a federal pension,
it's my bank that will have to consent to this right? I'm so lost and BROKE!
Any comments would be deeply appreciated. Thanks a bunch!
ps-I live in BC!!
3 replies
Member
Dec 11, 2013
254 posts
130 upvotes
Victoria
Yes, it does take a long time to set up a LIRA. Did you get your letter from your employer's pension plan? It should detail the commuted value of your pension funds. Take that letter to TD or another financial institution to set up the LIRA. Your union can't really help at this point. If you haven't received communication from the pension plan, call them to find out your options.

So a LIRA is a locked-in retirement account. It is form of RRSP but it's different in that it's locked in until retirement age. Rules vary by province and employer. Your financial institution holding your LIRA should know the rules for your account. Even though you live in BC, you might be subject to another province's rules if your employer has their headquarters there. It is possible to unlock some for various reasons. The most common reason would be low income, medical need, or financial need to secure housing.

For reference, the form to unlock a BC LIRA is here: https://www.fic.gov.bc.ca/pdf/Pensions/SOP-007-FHU.pdf

In the meanwhile, look into debt discussions to manage the credit card bills and student discussions to manage your tuition/rent/food needs.

Good luck!
Deal Addict
Jul 21, 2005
1247 posts
372 upvotes
Yah LIRA is locked in until I believe you are 55. I know when I quit my job I had to open a LIRA account for the transfer of the funds. There are some provisions for financial hardship and stuff, so perhaps those could apply. Next time don't spend money you don't have and you wouldn't be in this situation.
Deal Addict
Jan 15, 2017
1482 posts
1023 upvotes
So you haven't even got the LIRA set up yet?

It's very rare for pension plans to be "cashed out", even though I have heard many people use the term. Most common is for the amounts to be transferred from the pension plan to a locked in retirement account (LIRA). It can be very difficult for you to access those funds as the funds are ear marked for retirement. Just as you can't access your pension funds when you are working, LIRA's operate much the same way.

I assume that you have been living on student loans at this point. Any reason that you can't continue with that or even add a part time job to help? It can take some time to set up a LIRA and then apply for early withdrawal for hardship reasons. And I doubt that they will allow you to withdraw all of it, but I am not sure about that. Also, keep in mind that any withdraws are taxable as income, and that may impact your student loans.

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