LLQP Segregated Funds & Annuities · Component 2.4 · 30% of the exam
On leaving an employer with a DC pension, the member's options typically include:
- Leaving funds in the plan, transferring to a LIRA or a new plan, or buying a deferred annuity
- BCash only, since the member's account balance is paid out in full on termination
- CNothing until retirement age, since the funds must stay with the former employer's plan
- DTransfer to a TFSA, so the retirement savings can continue to grow tax-free without minimum withdrawals later
Correct answer: A) Leaving funds in the plan, transferring to a LIRA or a new plan, or buying a deferred annuity
Portability options preserve the pension purpose. Locking rules follow the funds.
Why the other options are wrong
- BCash is generally not available; the funds are locked-in.
- CSeveral portability options exist for a departing member.
- DLocked-in DC pension funds cannot be transferred to a TFSA.
Exam tip
DC termination: stay, LIRA, new plan, deferred annuity.
Common mistake
Transferring DC funds to an ordinary RRSP.
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.