knowledge topics
Locked-In Retirement Savings Vehicles Transfers
KNOWLEDGE EXPECTED OF: Both CFP® Professionals and QAFPTM Professionals
- Identify potential reasons why an individual may choose to transfer capital property into a locked-in retirement savings vehicle.
- Voluntary or involuntary termination of employment
- Retirement
- Breakdown of the annuitant’s relationship
- Death of the annuitant
- Death of the annuitant’s current (or former) spouse
- Termination of pension plan membership
- Termination of pension plan
- Voluntary choice by the annuitant
- Identify potential reasons why an individual may choose to transfer capital property out of a locked-in retirement savings vehicle.
- Retirement
- Unlocking of locked-in assets
- Breakdown of the annuitant’s relationship
- Death of the annuitant
- Voluntary choice by the annuitant
- Identify the types of plans from which capital property may be transferred tax-deferred into a locked-in retirement savings vehicle.
- Identify the types of plans to which capital property may be transferred tax-deferred out of a locked-in retirement savings vehicle.
- Explain the Canada Revenue Agency’s requirements related to tax-deferred transfers of capital property to or from a locked-in retirement savings vehicle upon the breakdown of a relationship between spouses.1
- Identify that property transferred into a locked-in retirement savings vehicle must adhere to the regulations and pension legislation of the jurisdiction in which the plan is regulated.
- Identify possible outcomes that may occur (based on jurisdiction) to divide property held within a locked-in retirement savings vehicle due to the breakdown of a relationship.
- Equalization payment in cash from locked-in retirement vehicle to the current or former spouse of the annuitant
- Equalization payment to a similar locked-in retirement savings or income vehicle belonging to the current or former spouse of the annuitant
- Equalization payment to a corresponding retirement savings or income vehicle belonging to the current or former spouse of the annuitant
- Equalization payment to an insurance company to purchase a life annuity payable to the current or former spouse of the annuitant
- Estimate the tax impact of transferring capital property into a locked-in retirement savings vehicle.
- Explain how each of the factors may impact the suitability of transferring capital property into a locked-in retirement savings vehicle, such as:
- Withdrawal options
- Tax impact
- Impact of future withdrawals on government benefits
- Evaluate how each of the factors may impact the suitability of transferring capital property into a locked-in retirement savings vehicle.
- Estimate the tax impact of transferring capital property out of a locked-in retirement savings vehicle.
- Explain how each of the factors may impact the suitability of transferring capital property out of a locked-in retirement savings vehicle, such as:
- Cash flow needs
- Withdrawal options
- Tax impact
- Government legislation (unlocking and transfer options)
- Evaluate how each of the factors may impact the suitability of transferring capital property out of a locked-in retirement savings vehicle.
Glossary of Verbs (mouse over to see definition)
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Define
To state exactly the meaning of
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Identify
To be aware of / to recognize and correctly name / to locate an appropriate resource
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Explain
To make clear the meaning of / to describe something in more detail or reveal relevant facts or ideas related to it
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Compare
To note the similarities and differences between two or more things
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Estimate
To determine an approximate value for
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Calculate
To find the value using mathematics
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Convert
To change from one form or purpose to another
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Evaluate
To reach a conclusion or make a judgement through careful study
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Interpret
To give the meaning of / to construe or understand / to translate orally
Read more about the Taxonomy used in the FP-BoK
