At what point can employees access funds in a locked-in RRSP?

The correct understanding of a locked-in RRSP involves recognizing that it is specifically designed to ensure that funds are preserved for retirement. Employees are generally unable to access these funds until they reach retirement age, as the primary purpose of a locked-in RRSP is to prevent premature withdrawal and to secure the funds for retirement income.

Locked-in RRSPs arise from pension plans and are subject to strict regulations which dictate when and how the funds can be accessed. Typically, individuals can begin to withdraw from their locked-in RRSPs once they reach the specified retirement age, usually 55 or older, depending on the applicable legislation. This ensures that the savings are utilized for their intended purpose, providing financial security in retirement.

In contrast, accessing the funds at any age after termination or upon permanent disability may have different stipulations or exceptions but does not align with the primary rule regarding locked-in RRSPs. The same applies to account balances exceeding a certain amount; while larger balances may provide more options for investment or management, they do not alter the fundamental restrictions placed on withdrawals from locked-in accounts.