Alberta’s Superintendent of Pensions today issued a warning about a potentially illegal unlocking scheme.

The superintendent notes that it has been advised of a potential unlocking scheme in which locked-in accounts (LIRAs or LIFs) are split and amounts are transferred from one financial institution to one or more institutions for the purpose of unlocking. As a result, the newly established locked-in account(s), and possibly the original locked-in account, each fall below the small amounts prescribed by the Employment Pension Plans Act.

There are two techniques being used, it notes, a complete transfer, and a partial transfer. However, the legislation prohibits these sorts of schemes, it stresses.

“At the moment, correspondence and form letters to financial institutions from one credit consulting firm have been brought to the Superintendent’s attention for investigation,” it says. “We recommend all financial institutions carefully review correspondence instructing the transfer or cashing out of locked in accounts in all cases. Any correspondence from any source that appears contrary to the Act should be submitted to our office for review.”