I'm a US citizen and my husband recently moved to the US and is in the process of adjusting this status to a permanent resident. His pension fund representative says that my husband MUST transfer his RRSP pension fund from Canada to a locked-in plan at a Canadian bank in the US, since "the Ontario Pension Act does not permit a withdrawal." Apparently, leaving the account in Canada is not offered as an option.
Since I have read about others who have left their RRSP accounts in Canada, I'm confused. Does my husband really need to transfer his RRSP to a locked-in account (and what is that?) in the US? If so, how would he go about doing that?
Thanks
RRSP transfer from Canada to US
Moderator: Mark T Serbinski CA CPA
There are no ' Canadian banks in the US' that would accept such any RRSP or LIRA (locked-in retirement account). In fact there is no such thing as a Cdn bank in the US. These are merely US banks that have a strong affiliation to a Cdn Bank. It is illegal for any US entity to handle such an RRSP/LIRA account. His fund rep is flat wrong. Moreover, even if one could, the removal of the funds from canada would constitute an illegal withdrawl of Locked-in funds, and even if it was legal, it would be a fully taxable event.
What your husband <b>must</b> do is set up a LIRA at a Cdn institution in Canada, and leave it there until the rules for LIRA allow hom to take some out, as pension, just like any other Cdn with such a LIRA.
<i>nelsona non grata... and non pro</i>
What your husband <b>must</b> do is set up a LIRA at a Cdn institution in Canada, and leave it there until the rules for LIRA allow hom to take some out, as pension, just like any other Cdn with such a LIRA.
<i>nelsona non grata... and non pro</i>
Ideally, this should have been done before leaving Canada, as many Financial institutions are leery of beginning an investment relationship with a US resident.
Given that your pension rep was completely off-base in his LIRA advice, isa it possible that he is wrong that you MUST move the pension funds out of the pension? Most pension funds allow their former contributors to maintain their account. You could just leave it there.
Otherwise, your husband will have to find a willing fund manager (TDWaterhouse is one) that will deal with a US resident. See the threads below by 'Rickerbucks' and others that deal with the 'RRSP while in US issue'. He could also dela with the firm that curreently handles his own RRSP, although I suspect that they will wany to ditch him the moment he advises them that he is in US -- and he MUST advise them that he is in US.
<i>nelsona non grata... and non pro</i>
Given that your pension rep was completely off-base in his LIRA advice, isa it possible that he is wrong that you MUST move the pension funds out of the pension? Most pension funds allow their former contributors to maintain their account. You could just leave it there.
Otherwise, your husband will have to find a willing fund manager (TDWaterhouse is one) that will deal with a US resident. See the threads below by 'Rickerbucks' and others that deal with the 'RRSP while in US issue'. He could also dela with the firm that curreently handles his own RRSP, although I suspect that they will wany to ditch him the moment he advises them that he is in US -- and he MUST advise them that he is in US.
<i>nelsona non grata... and non pro</i>