Once you are vested, the lump sum of your pension is known as a commuted value (CV). In most scenarios, to remove these funds from the Plan (and not transfer them to another plan) means the CV must be transferred to a Locked In Retirement Account (LIRA). A LIRA is a special type of registered retirement savings account designed to hold locked-in pension funds as retirement income.
Your commuted value transfer options are:
- transfer your commuted value to your LIRA and have any non-locked funds paid as a taxable cash lump sum payment; or
- transfer your commuted value to your LIRA and have any non-locked funds transferred to your Registered Retirement Savings Plan (RRSP).
There are strict rules about how and when the funds within a LIRA can be accessed. Normally, money cannot be taken from a LIRA until the owner reaches age 50. Your banking institution will have more information, or you can read more about converting LIRA funds on the Government of Alberta website.
If you transfer your commuted value out of MEPP, you are no longer entitled to a lifetime MEPP pension. Once the transfer to the LIRA is made, you will not be able to change your mind.
If you have a CPS relationship between MEPP and the Public Service Pension Plan (PSPP), you can withdraw funds from one plan while leaving them in the other, so long as you are no longer active in either plan. However, this will affect your future pension benefit. Please contact us for more information.
Note: Legislative limits establish the percentage of funds that must go to a LIRA and percentage that must go to other retirement savings or be paid to you as taxable income.
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