Pooled Registered Pension Plans Regulations — 40
Prescribed restricted life income fund 40 (1) A restricted life income fund is prescribed for the purposes of paragraphs 50(1)(b) and (3)(b), 53(4)(b) and 54(2)(b) of the Act if it (a) sets out the method of determining the value of the restricted life income fund, including the valuation method used to establish its value on the death of the holder or on a transfer of assets; (b) provides that the holder of the restricted life income fund shall, at the beginning of each calendar year or at any other time agreed to by the financial institution with whom the contract or arrangement was entered into, decide the amount to be paid out of the fund in that year; (c) provides that in the event that the holder of the restricted life income fund does not notify the financial institution with whom the contract or arrangement for the restricted life income fund was entered into of the amount to be paid out of the fund in a calendar year the minimum amount determined in accordance with the Income Tax Act shall be paid out in that year; (d) provides that for any calendar year before the calendar year in which the holder of the restricted life income fund reaches 90 years of age, the amount of income paid out of the life income fund shall not exceed the amount determined by the formula C/F where C is the balance in the holder’s account (a) at the beginning of the calendar year, or (b) if the balance at the beginning of the calendar year is zero, on the day on which the election was made; and F is the value, at the beginning of the calendar year, of an annual $1 payment, payable on January 1 of each year between the beginning of that calendar year and December 31 of the year in which the holder reaches 90 years of age, established using an interest rate that is (a) for each of the first 15 years, not more than the monthly average yield on Government of Canada marketable bonds of maturity over 10 years, as published by the Bank of Canada, for the month of November before the beginning of each calendar year, and (b) for any subsequent year, not more than 6%; (e) provides that, for the calendar year in which the contract or arrangement was entered into, the amount determined under paragraph (d) shall be multiplied by the number of months remaining in that year and then divided by 12, with any part of an incomplete month counting as one month; (f) provides that if on the day on which the restricted life income fund was established part of the fund was composed of funds that had been held in another restricted life income fund of the holder earlier in the calendar year in which the fund was established, the amount determined under paragraph (d) is deemed to be zero in respect of that part of the fund for that calendar year; (g) provides that the funds in the restricted life income fund may only be (i) transferred to another restricted life income fund, (ii) transferred to a restricted locked-in savings plan, or (iii) used to purchase an immediate life annuity or a deferred life annuity; (h) provides that, on the death of the holder of the restricted life income fund, the funds shall be paid to the holder’s survivor by (i) transferring the funds to another restricted life income fund or to a life income fund, (ii) transferring the funds to a locked-in RRSP or to a restricted locked-in savings plan, or (iii) using the funds to purchase an immediate life annuity or a deferred life annuity; (i) provides that, subject to subsection 53(3) of the Act, the funds, or any interest or right in those funds, shall not be transferred, charged, attached, anticipated or given as security and that any transaction appearing to do so is void or, in Quebec, null; (j) provides that, in the calendar year in which the holder of the restricted life income fund reaches 55 years of age or in any subsequent calendar year, the funds may be paid to the holder in a lump sum if the holder (i) certifies that the total value of all assets in all locked-in RRSPs, life income fund