LLQP Segregated Funds & Annuities · Component 2.4 · 30% of the exam
A member leaving a group RRSP may:
- Transfer the balance to a personal RRSP or another group plan, or withdraw it as taxable income
- BOnly buy an annuity with the balance, since group retirement savings must be converted to income on departure
- CLose the funds contributed by the employer, since group RRSP contributions vest only at retirement
- DOnly transfer to a LIRA, since money from an employer plan is treated as locked-in pension money
Correct answer: A) Transfer the balance to a personal RRSP or another group plan, or withdraw it as taxable income
Portability of group RRSP funds is unrestricted (subject to withholding on withdrawals). This is a common client transition.
Why the other options are wrong
- BA departing member has several options, not only an annuity.
- CThe funds belong to the member.
- DLIRAs are for locked-in pension funds, not group RRSPs.
Exam tip
Group RRSP exit: transfer to personal RRSP or withdraw (taxable).
Common mistake
Transferring group RRSP funds into a LIRA.
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.