Is there a way to cash out money previous employer put in a pension plan locked in until retirement?

[Nir]

The name of this plan is DCPP - defined contribution pension plan. When leaving the company the employee can transfer the fund to any other bank as long as it remains in a registered, locked-in product or is used to purchase an annuity.

Is there a way to withdraw money after leaving the company and transferring it to a new locked-in RSP account? The employee is willing to pay penalty, tax etc. The issue is not the penalty but rather the inability to use the money before retirement age. THANKS.

 

[MikeMcCrae]

A further question to that question... could that DCPP money be put into an arms length second mortgage?

 

[trudijohnston]

I have some locked in pension money also if thats what you are referring to. I have looked around at options and have been told that you cannot withdraw the money so I placed it into rrsp mortgages until 55. My plan allows me to start withdrawing 8% a year after I reach 55. I can then decide if I am going to cash it out or transfer it into an rrsp. Is that what you are asking???

 

[RobMacdonald]

If you transfer the Locked In RSP to a Self Directed RSP with an institution like Canadian Western Trust, your funds will still be locked in until retirement but you would far more flexibility with investment options. You could finance arm`s length second mortgages as Mike mentioned, or put the funds to a Mortgage Investment Corporation, both which could be great options for steadier returns that the stock market.

 

[Nir]

Thank You everyone for the valuable information! Neil.