A type of registered retirement savings alternative that locks in the pension funds in investments. While the funds are locked in, they are unavailable for cash-out. Pension funds that are transferred to a LIRA are used to purchase a life annuity, transferred to a life income fund (LIF) or to a locked-in retirement income fund (LRIF). Upon reaching the retirement age, the life annuity, LIF and/or LRIF provide a pension for life.

The locked-in retirement account is designed to hold pension funds for a former plan member, former spouse or common-law partner or a surviving spouse or partner. The LIRA may be elected at any age to hold funds transferred from a pension plan upon the termination of membership in a pension plan; the disintegration of a marriage or common-law partnership; or death before retirement. Unlike RRSPs, which can be cashed in whenever the owner decides, a locked-in retirement account does not provide such an option.