locked-in RRSP redemption - Locked in LIRA redemption after two years

Hi David,

You may remember that we spoke a few weeks ago about trying to unlock a locked in RRSP as a foreign resident.  Well, we finally unlocked it and got the funds and I wanted to thank you for helping.  It took some perservierence but it paid off.

Something you may want to warn people about is the amount of tax withheld.  As a foreign resident I am not entitled to a "personal exemption" but I pay 25% flat tax rate.  When the switch was made,  MRS withheld more than that and I caught it.  This is not the first time this has happend to me and it also happend when my husband closed his RRSP account.  The extra 4% or so can make a huge difference!

Thanks again for your help.

All the best,

xxxxxxxxx, Mexico


david ingram replies

It is unusual for them to withhold too much.  Usually, particularly with smaller amounts, they withhold too little an dthe taxpayer is hit with a bill at the end of the year.

25% is the fixed withholding for a non-resident of Canada.  If they do withhold too much, one can file a tax return and get the difference back.

It is also not unusual to be turned down at first.

The following person was turned down as well but Dan Walkow of Seabank Capital managed to free it up for the person (who is not a client) and he sent me the following at the end of a long comment about green cards.

P.S.  The two year out of Canada residency with respect to LIRA's did apply to me.

Hi David

I have a telephone apt for 9:30 Wed. morning regarding trying to find a creative way to unlock my locked in RRSP.  The following is a response which I got from MRS as to why they can not do if for me.  Although the fund was registered in Ontario,  before I became a foreign resident in Mexico, I had always lived in Alberta and should therefore I woneder if i should not be subject to Alberta regulations, not Ontario.  If this is mission impossible then I guess I will have to accept it but if you can in fact find a creative way to open the account I would like to engage your service.


david ingram replies:
I have no method of removing an Ontario LIRA from the account as a non-resident.

Alberta yes, BC maybe but Ontario has not passed legislation to make it happen.

It is expected to happen but has not happened yet.  One of my newsletters implied that Ontario was okay but that was premature or wishful thinking as the legislation did not get passed with a change in government.

Your only solution is to have the company designate it Alberta somehow but that is unlikely becase the pensions are usually designated to be at a company's head office..  However, A letter confirming your employment in Al;berta all those years might walk through the paperwork with Revenue Canada.  Since they seem to be able to deal with its existence in Ontario, even though it is now in Quebec, it just might work.

The Province of Alberta would also need to agree. 

If your research about Ontario plans was from my site alone I apologize. I was not alone though.  For a few months in 2006, a lot of us thought it had happened.

david ingram

From: "MRS Correspondence" <[email protected]>

Dear xxxxxxxxxxxxxx

Thank you for your reply and we apologize for the delay in our response.
Money within locked-in plans originated from registered pension plans, and as a result, these types of accounts are regulated by pension legislation.  The legislation places restrictions on redemptions from such accounts.  Provinces have their own laws and regulations that govern pensions registered with their provincial pension regulator. 
We have been in contact with your former employer.  They have advised this locked-in plan was established with Merrell Dow under Ontario legislation. Following corporate restructuring the company became known as Marion Merrell Dow Canada, based in Laval, QC. As part of this restructuring, they were converting plans to Quebec legislation, however, they indicate this process was not complete at the time of your departure from the company in 1995, thus the initial designation under Ontario legislation would be accurate.
Under Ontario pension legislation, there is no provision for the unlocking of funds due to non-residency.
For further information, you may wish to contact your former employer, now known as Hoechst Marion Roussel and still based at the same address in Laval, QC.  Their website can be found at www.sanofi-aventis.ca
We also recommend that you consult with your Financial Advisor xxxxxxxxxxx  in Victoria, BC, at xxxxxxxxxxx.
Should you have any questions or concerns, or if we can be of further assistance, please e-mail us at [email protected].
Sara Winnett
Client Service Correspondent
(416) 964-0660 or 1-800-265-6424, ext. 3358
Account Access now available at www.mrs.com

From: ]
Sent: Monday, July 16, 2007 5:37 PM
To: MRS Correspondence
Subject: RE: locked-in RSSP redemption

Regarding my locked-in RRSP

I am somewhat confused as to the logic regarding your inability to release the funds. 

 From the research I have done there are 3 provinces which allow the funds to be unlocked.  Ablerta, BC and Ontario.  I was a resident of Alberta all my life, before retiring to Mexico in 1999. 

The company which I worked for had is head office in PQ.,  so first I do not understad how my RRSP originated in Ontario ad eve if it did, what about the Alberta residency? 

If I were to choose to have a monthy pay out from this fund would I not be subject to the flat 25% withholdingtax and not be intitled to the $6,000 (0r whatever) personal exemption.  How can it be that on one had I am being treated as a foreign resident but on the other am subject provincial regulations regarding my money?  Could you or someone please explain this to me.



From: "MRS Correspondence" <[email protected]>
To: "
Subject: RE: locked-in RSSP redemption
Date: Mon, 16 Jul 2007 16:56:06 -0400

Dear xxxxxxxxxxxx
Thank you for your e-mail regarding your M.R.S. RRSP #29xxxxx.
A check of our records indicates this plan is locked-in under Ontario pension legislation.  Under that legislation, it is not possible to apply as a non-resident to unlock the funds, and therefore we would not be able to process the request.
A notice on this issue was sent by fax on June 12, 2007, to the office of your Financial Advisor on file, xxxxxxxxxxxxxxxxx. Should you have any questions or concerns, or if we can be of further assistance, please contact Client Services at 1-800-387-2087, or e-mail us at [email protected].
Sara Winnett
Client Service Correspondent
(416) 964-0660 or 1-800-265-6424, ext. 3358
Account Access now available at www.mrs.com
-----Original Message-----
Sent: Monday, July 16, 2007 3:39 PM
To: MRS Correspondence
Subject: Re: locked-in RSSP redemption


I have a SDLRSP with MRS plan number 29xxxxxxxx. xxxxxxxxs xxxxx Financial services Inc. suggested I deal directly with you.  For eight years I have lived outside of Canada and am officially a foreign resident.  I believe that the Plan was registered in PQ (company head office) but I was a resident of Alberta throughout my working life.  I wish to cash out my SDLRSP.  What do you need from me to facilitate this?