(IMPORTANT NOTICE - April 9, 2014: The future of Western's Retirement Income Funds program is currently under review. Learn more about the future of the Western's RIF Program)
Western is pleased to offer retired members of Western’s Pension Plans access to the Western Retirement Income Funds (Western RIF) program. Retirement Income Funds represent one option for converting accumulated retirement savings in your pension plan into a pension income following retirement.
The Western RIF program includes access to a Registered Retirement Income Fund (RRIF) for your non-locked-in registered savings and access to a New Life Income Fund (New LIF) for your locked-in registered savings. Members who started a retirement income fund prior to 2009 may have their locked-in funds in an Old LIF or an LRIF instead.
When you were an active member of the pension plan, accumulating pension savings, you had responsibility for managing the investment allocation of your funds. The Western RIF works the same way. You allocate your funds, choosing from the options available. Additionally, you will be asked to decide the amount of income you wish to receive from your accounts and whether you want to receive this income on a monthly, quarterly or annual basis.
Beginning October 2013 the Western RIF Program is being reviewed to identify improvements for the administration of the program.
Please note that the Western RIF Program is only available to residents of Canada. For non-residents you may wish to investigate retirement income funds offered through Canadian financial institutions.
The investment options available within the Western RIF program include some of the same options available to active members of the pension plans. These options allow you to maintain a diversified portfolio. They include the:
View the Western RIF Investment Options as a picture showing the relationships between funds.
Changes to your investment mix can be made as often as monthly. Investment changes are due by the 25th to take effect at month-end. Changes can be made online directly in your account.
Once you have established a retirement income fund you will be required to withdraw and receive a minimum amount of income each year from each retirement income fund account. For a locked-in retirement income fund (New LIF, Old LIF, LRIF) there is also a maximum or upper limit on how much can be withdrawn annually from the account. Pension regulators produce a schedule each year advising of these payment criteria.
View the current year’s RIF Payment Levels – a schedule of minimum and maximum percentages.
The maximum payment which can be taken from the locked-in account (Old LIF, New LIF, LRIF) is the greater of the schedule and the actual investment gain from the prior calendar year.
Each year members of the Western RIF program will receive correspondence by mail in February indicating the annual minimum and maximum (if applicable) amounts for each account. Even if you wish your payment to remain the same we require you to make a formal election to ensure that your payment remains within the criteria.
You can conveniently elect your payment online directly in your account. Payment changes made by the 15th of the month will take effect for the first of the following month.
See step by step Instructions for Changing your RIF Payment Online.
Instructions on how to view your past RIF elections.
Payments from a retirement income fund are considered taxable income and you will be required to pay taxes based on your total income from all sources. Canada Revenue Agency mandates that tax be withheld on payments which exceed the minimum (see above) required payment each year. However, most members elect a tax withholding rate corresponding with their expected tax obligation so they don’t receive a large tax bill.
For members aged 65 or over, the income received from the Western RIF will be considered pension income and is therefore eligible for pension income splitting with your spouse.
It is best to discuss the most appropriate strategy for your Western RIF with your accountant or financial advisor.
When a New LIF is created the member will have a one-time option to “unlock” up to 50% of the assets transferred to the New LIF account within 60 days of the transfer. Note that if assets already in an Old LIF, New LIF or LRIF are subsequently transferred to a New LIF there will not be another “unlocking” opportunity.
Read more about the unlocking option.