LLQP Segregated Funds & Annuities · Component 1.2 · 35% of the exam
An 'unlocking' provision for locked-in funds may allow:
- ANothing before retirement, since locked-in funds can never be accessed under any circumstances
- Withdrawal in circumstances set by the jurisdiction: hardship, shortened life expectancy, small balance, non-residency
- CTransfer to a TFSA, so the funds can grow tax-free and be withdrawn without restriction
- DUnlimited withdrawals once the holder reaches the jurisdiction's early retirement age
Correct answer: B) Withdrawal in circumstances set by the jurisdiction: hardship, shortened life expectancy, small balance, non-residency
Unlocking rules differ by jurisdiction. Assessing locked-in funds includes knowing which exceptions apply.
Why the other options are wrong
- AUnlocking exceptions exist in every pension jurisdiction, though they are narrow.
- CLocked-in funds transfer to registered vehicles, not TFSAs.
- DUnlocking is limited even after the early retirement age.
Exam tip
Unlocking: hardship, short life expectancy, small balance, non-residency, age-based partial.
Common mistake
Applying one province's unlocking rules to a federally regulated plan.
What this tests
CISRO competency component 1.2 — Assess the client's needs and situation — which is weighted at 35% of the Segregated Funds & Annuities module. Written against the published curriculum.
More from component 1
- The first step before recommending a segregated fund or annuity is to:
- A client's 'time horizon' for an investment is:
- 'Risk tolerance' in an investor profile refers to:
- A client says he wants 'high returns with no risk of losing money'. The agent should:
- Investment objectives are commonly classified as:
- Why is the client's marginal tax rate relevant to a segregated fund recommendation?
Practice the whole Segregated Funds & Annuities module
Timed sets weighted like the exam, and review of every question you miss. Free to start.