Locked-In Retirement Savings Vehicles Attributes

KNOWLEDGE EXPECTED OF: QAFP® Professionals

Highest Knowledge Level: Understanding

Knowledge Levels and Associated Verbs


Awareness
The state of being aware that something exists / to have familiarity with a particular activity or subject
Understanding
To comprehend the general relationship of particulars / to have an expertise with how something works
Application
Ability to put information to use / to use knowledge for relevant, practical purposes
Evaluation
To judge or conclude by utilizing data / a systematic determination of something’s worth or significance
Define
To state exactly the meaning of
Identify
To be aware of / to recognize and correctly name / to locate an appropriate resource
Explain
To make clear the meaning of / to describe something in more detail or reveal relevant facts or ideas related to it
Determine
To ascertain / to come to a decision, such as by investigation or reasoning
Compare
To note the similarities and differences between two or more things
Estimate
To determine an approximate value for
Calculate
To find the value using mathematics
Convert
To change from one form or purpose to another
Evaluate
To reach a conclusion or make a through careful study
Interpret
To give the meaning of / to construe or understand / to translate orally

Hold cursor over or click on each term to read its definition.

  • Define a locked-in retirement savings vehicle.† 
  • Identify the legislation relevant to a locked-in retirement savings vehicle.
    • Federal Income Tax Act
    • Pension legislation for the jurisdiction in which the plan operates 
  • Identify the areas in which legislation related to locked-in retirement savings vehicles may differ across jurisdictions, such as:
    • Plan criteria
    • Transfers
    • Withdrawals
      • Minimum amounts
      • Maximum amounts
    • Unlocking provisions 
    • Spousal consent requirements 
  • Identify the jurisdiction of a locked-in retirement savings vehicle.  

    • Explain advantages and disadvantages associated with locked-in retirement savings vehicles.
    • Define the parties to each of the locked-in retirement savings vehicles.
      • Annuitant
      • Beneficiary
      • Issuer / Provider
      • Successor annuitant 
    • Explain the role of each of the parties to the locked-in retirement savings vehicle. 
    • Explain how a locked-in retirement savings vehicle is funded.
    • Explain how income earned within a locked-in retirement savings vehicle is treated for tax purposes.
    • Identify the importance of making a valid beneficiary designation.
       

    † The term locked-in retirement savings vehicle is used to denote Locked-In Retirement accounts (LIRAs), Locked-In Registered Retirement Saving Plans (LRSPs) and Restricted Locked-In Savings Plans (RLSPs). The regulations required of both LIRAs and LRSPs are very common, with the difference in nomenclature being subject to the province or territory in which the plan is available. The regulations required of all plans follow similar regulations across jurisdictions with variations related to each jurisdiction’s pension legislation. Unless otherwise noted, where “locked-in retirement savings vehicle” is used throughout this document it may be taken to mean one of these plans or a similar vehicle that meet the requirements of a registered plan under the Federal Income Tax Act and the pension legislation of the jurisdiction in which the plan is available. 

    KNOWLEDGE EXPECTED OF: CFP® Professionals

    Highest Knowledge Level: Understanding

    Knowledge Levels and Associated Verbs


    Awareness
    The state of being aware that something exists / to have familiarity with a particular activity or subject
    Understanding
    To comprehend the general relationship of particulars / to have an expertise with how something works
    Application
    Ability to put information to use / to use knowledge for relevant, practical purposes
    Evaluation
    To judge or conclude by utilizing data / a systematic determination of something’s worth or significance
    Define
    To state exactly the meaning of
    Identify
    To be aware of / to recognize and correctly name / to locate an appropriate resource
    Explain
    To make clear the meaning of / to describe something in more detail or reveal relevant facts or ideas related to it
    Determine
    To ascertain / to come to a decision, such as by investigation or reasoning
    Compare
    To note the similarities and differences between two or more things
    Estimate
    To determine an approximate value for
    Calculate
    To find the value using mathematics
    Convert
    To change from one form or purpose to another
    Evaluate
    To reach a conclusion or make a through careful study
    Interpret
    To give the meaning of / to construe or understand / to translate orally

    Hold cursor over or click on each term to read its definition.

    • Define a locked-in retirement savings vehicle.† 
    • Identify the legislation relevant to a locked-in retirement savings vehicle.
      • Federal Income Tax Act
      • Pension legislation for the jurisdiction in which the plan operates 
    • Identify the areas in which legislation related to locked-in retirement savings vehicles may differ across jurisdictions, such as:
      • Plan criteria
      • Transfers
      • Withdrawals
        • Minimum amounts
        • Maximum amounts
      • Unlocking provisions 
      • Spousal consent requirements 
    • Identify the jurisdiction of a locked-in retirement savings vehicle.    
    • Explain advantages and disadvantages associated with locked-in retirement savings vehicles.
    • Define the parties to each of the locked-in retirement savings vehicles.
      • Annuitant
      • Beneficiary
      • Issuer / Provider
      • Successor annuitant 
    • Explain the role of each of the parties to the locked-in retirement savings vehicle.
    • Explain how a locked-in retirement savings vehicle is funded.
    • Explain how income earned within a locked-in retirement savings vehicle is treated for tax purposes.
    • Identify the importance of making a valid beneficiary designation.
       

    † The term locked-in retirement savings vehicle is used to denote Locked-In Retirement accounts (LIRAs), Locked-In Registered Retirement Saving Plans (LRSPs) and Restricted Locked-In Savings Plans (RLSPs). The regulations required of both LIRAs and LRSPs are very common, with the difference in nomenclature being subject to the province or territory in which the plan is available. The regulations required of all plans follow similar regulations across jurisdictions with variations related to each jurisdiction’s pension legislation. Unless otherwise noted, where “locked-in retirement savings vehicle” is used throughout this document it may be taken to mean one of these plans or a similar vehicle that meet the requirements of a registered plan under the Federal Income Tax Act and the pension legislation of the jurisdiction in which the plan is available.


    Additional Knowledge Expected of CFP Professionals
    • Identify qualified investments as prescribed by the Canada Revenue Agency that may be held in a locked-in retirement savings vehicle.1
    • Identify non-qualified investments as prescribed by the Canada Revenue Agency that may not be held in a locked-in retirement savings vehicle.2
    • Explain the tax that may be imposed by the Canada Revenue Agency when a locked-in retirement savings vehicle contains a non-qualified investment.3
    • Identify prohibited investments as prescribed by the Canada Revenue Agency that may not be held in a locked-in retirement savings vehicle.4
    • Explain the tax that may be imposed by the Canada Revenue Agency when a locked-in retirement savings vehicle contains a prohibited investment.5

    REFERENCES
    next / Locked-In Retirement Savings Vehicles Withdrawals Arrow Right