OSFI Updates Variable Benefit Account Maximums Under PBSA for 2025
Published December 13, 2024
The Office of the Superintendent of Financial Institutions (OSFI) announced updated life income fund (LIF) and variable benefit payable from a defined contribution plan maximum annual payment amounts for 2025.
Are there minimum or maximum amounts that can be withdrawn from a LIF, restricted life income fund (RLIF) and variable benefit account?
LIFs and RLIFs are personal retirement income funds that provide periodic retirement income to the holder. A variable benefit account is similar to a LIF but provides retirement income directly from a pension plan with defined contribution provisions.
The periodic income from a LIF, RLIF or variable benefit account is subject to minimum and maximum annual withdrawal limits. The minimum annual withdrawal amount is determined under the Income Tax Regulations and the maximum annual withdrawal amount is determined under the Pension Benefits Standards Regulations, 1985. The maximum annual withdrawal limit is intended to maintain a retirement income for the fund or account holder or their survivor, as the case may be, until at least the age of 90.
How much money can be withdrawn from a LIF, RLIF or variable benefit account?
A table shows "Age on December 31, 2024" and "Percentage of LIF, RLIF or Variable Benefit Account Balance as at January 1, 2025." (see Q&A 2)
Does the amount of income permitted to be withdrawn from an existing LIF, RLIF or variable benefit account increase in a given calendar year if money is transferred from a locked-in registered retirement savings plan or pension plan during the year?
No. Sections 20.1, 20.3 and 21.1 of the Pension Benefits Standards Regulations, 1985, provide that the maximum annual amount of income that may be paid in a given calendar year will be calculated based on the balance of the fund at the beginning of the year.