LLQP Segregated Funds & Annuities · Component 2.4 · 30% of the exam
A group RRSP's 'withdrawal restriction' imposed by the employer:
- AIs pension locking under provincial legislation, so the funds cannot be withdrawn until retirement age
- BApplies for the rest of the employee's life, since the employer's rule is written into the plan permanently and follows the funds
- CIs illegal, since an RRSP holder has a statutory right to withdraw from the plan at any time
- A plan rule to preserve the plan's purpose; it is not legislated locking and ends when the employee leaves
Correct answer: D) A plan rule to preserve the plan's purpose; it is not legislated locking and ends when the employee leaves
Employers can restrict in-service withdrawals contractually; the funds remain RRSP funds, not locked-in.
Why the other options are wrong
- AIt is not statutory locking.
- BThe employer's restriction ends when the employee leaves.
- CIt is a permitted plan design.
Exam tip
Group RRSP restrictions = plan rules, not pension locking.
Common mistake
Telling an employee their group RRSP is locked-in for life.
What this tests
CISRO competency component 2.4 — Analyze the available products that meet the client's needs — which is weighted at 30% of the Segregated Funds & Annuities module. Written against the published curriculum.
More from component 2
- A segregated fund's 'guaranteed amount' after a partial withdrawal under proportional reduction is:
- A distinctive estate advantage of a segregated fund over a non-registered mutual fund held jointly with a child is:
- Segregated fund guarantees are most valuable relative to their cost when:
- A segregated fund's annual statement reports:
- Compared with a segregated fund, an exchange-traded fund (ETF) generally offers:
- A segregated fund's 'automatic death benefit reset' feature:
Practice the whole Segregated Funds & Annuities module
Timed sets weighted like the exam, and review of every question you miss. Free to start.